China's factory gate inflation accelerates in August

China's factory price inflation, a key barometer of the industrial sector, accelerated sharply in August, reflecting strong demand and a reduction in excess capacity which has plagued China's economy.

The producer price index (PPI), which measures costs for goods at the factory gate, rose 6.3 percent year on year in August, much faster than expected, official data showed Saturday.

The pace of PPI expansion jumped from 5.5 percent registered in July, according to the National Bureau of Statistics, which Bloomberg said represented 12 consecutive months of growth.

China's consumer price index (CPI), a main gauge of retail inflation, meanwhile rose 1.8 percent year-on-year in August, stronger than the 1.4 percent posted in July.

The increase was driven by the rise in prices for produce like eggs and vegetables which have been driven up by heavy rain and high temperatures over the summer.