Things are getting a bit more costly in China. Official data shows that consumer inflation rose 1.8 percent on year in December while growth in factory prices slowed to a 13-month low. Experts say, the divergence between food and non-food prices will be in focus this year.

Data from the National Bureau of Statistics shows that, the Consumer Price Index rose 1.6 percent in 2017. That's 0.4 percentage points lower than the previous year. Lower food prices are the major reason behind this. The NBS said food prices were down 1.4 percent on year last year. It was the first drop since 2003, mostly because of lower pork and vegetable prices. However, others costs such as healthcare, railway fares and utilities, were on the rise on the back of government reforms. Non-food prices rose 2.3 percent last year, mainly in the services sector. Experts believe this divergence will remain for the rest of the year.

XU HONGCAI, CHIEF ECONOMIST CHINA CENTER FOR INT'L ECONOMIC EXCHANGES "There is not much room to grow for basic item prices like food or garments. But the services sector has a different story, especially in those emerging consumer spending sectors. The supplies in those sectors are still far behind the demand, and that could trigger prices to increase in the future. But in general, inflation is expected to keep 2-percent growth this year. That's also what the government would love to see."

Meanwhile, the Producer Price Index rose 4.9 percent on year in December, the lowest reading in 13 months. However, analysts said not to worry.

LIU YUANCHUN, VP RENMIN UNIVERSITY OF CHINA "We had a strong PPI growth in the same period of 2016, as well as in the first half of last year. That is why we see a slower PPI growth last month."

The NBS said oil and metal producers are behind the slower PPI growth. However, the price of natural gas jumped last month thanks to the cold weather. Full year data shows the PPI rose 6.3 percent on year last year.