China’s inflation print for June at 2.7 percent, a four-month high, was higher than forecast, but part of the picture could be obfuscated by a lack of accounting for the ever-growing online retail sector.
Gross domestic product figures have been consistently revised down this year from 8 percent to around 7.4 percent by July, with significant doubt over the reliability of official data. Some analysts forecast the more likely GDP print is around 5 percent, given the lack of punishment for falsifying local data and incentives for better growth figures for regional prints.
With an increasing share of shopping carried out online through websites such as Taobao, Tmall and Paipai, there is an increasing argument for online retail numbers -which had lifted one metric of inflation closer to 7 percent in April – to be included in the headline CPI. That metric is the retail sector’s internet shopping price index (iSPI).
This includes (based on the compilation of Taobao sales data) food, tobacco, liquor, clothing, household equipment and maintenance services, health care and personal products, transport and communications, entertainment and educational products and services including residential and office supplies. If inflation were calculated on this basis, it could be more accurately computed at 3.15 percent today.
On the connection between the iSPI and the CPI numbers, analysts at ICBC have said: