China's Export Prices Flip from Deflation to Double-Digit Inflation

China's export prices have made a dramatic turn from persistent deflation to double-digit inflation. This shift is not isolated, as price pressures across advanced Asia have accelerated even faster.

The more interesting twist is that China still takes a harder hit on the other side of the ledger. Import prices rose 21.0% year on year in July, reflecting the country's dependence on imported semiconductors, crude oil, copper, iron ore, and other raw materials.

This means the terms of trade are deteriorating even as export prices rise, which is hardly an ideal combination for Chinese corporate margins.