China's National Bureau of Statistics released November 2025 consumer price index (CPI) and producer price index (PPI) data on December 10. The CPI rose 0.7% year-on-year, marking the highest increase since March 2024, while showing a slight 0.1% month-on-month decline. Meanwhile, the PPI fell 2.2% year-on-year but rose 0.1% month-on-month for the second consecutive month. Core CPI, excluding food and energy, increased 1.2% year-on-year, maintaining growth above 1% for three straight months. Experts view these figures as positive signals, reflecting steady consumption recovery and moderate domestic demand improvement.
Food and energy prices diverged in November, with food prices shifting from a 2.9% year-on-year decline in October to a 0.2% increase. Fresh vegetable prices surged 14.5%, offsetting continued declines in pork prices (-15.0%, though narrowing). Wen Bin, chief economist at China Minsheng Bank, noted that while service prices dragged CPI down seasonally, food prices rose 0.5% month-on-month due to weather-related supply constraints on vegetables. Energy prices fell 2.2% month-on-month amid declining global oil prices. Core CPI's stable 1.2% growth indicates effective domestic demand policies.
The PPI's continued month-on-month growth (+0.1%) reflects multiple factors including seasonal demand, imported inflation, and anti-overcapacity policies. Coal prices jumped 4.1% due to winter demand, while international nonferrous metal price increases lifted domestic sectors. Anti-overcapacity measures notably improved PPI performance, with emerging industries like photovoltaics and new energy vehicles showing narrowing price declines.
Analysts expect prices to maintain a moderate recovery trajectory. Wen projects 2026 CPI growth around 0.8%, with food prices potentially rising as hog supply adjusts, while energy prices may remain pressured. PPI declines could narrow to 0.5% as industrial policies take deeper effect. More optimistic forecasts suggest core CPI may exceed 1.5% by year-end, with 2026 CPI potentially reaching 2%, supported by domestic demand policies and industrial upgrades.
Overall, November's price data signals improving demand and stabilizing industrial conditions. While pork and energy prices remain drags, core consumption resilience and coordinated macro policies create conditions for stable price recovery. Sustained implementation of demand-boosting and structural adjustment policies will be crucial to consolidate this positive trend.
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