Data released by the National Bureau of Statistics on January 9 shows that the Consumer Price Index (CPI) in December 2025 rose by 0.8% year-on-year. The growth rate expanded by 0.1 percentage points compared to November 2025, climbing to the highest level since March 2023. On a month-on-month basis, it shifted from a decline to an increase, rising by 0.2%. The Producer Price Index (PPI) increased month-on-month for the third consecutive month, with the year-on-year decline narrowing, indicating positive price changes in some industries.
The December CPI and PPI data signify a favorable trend of reasonable price recovery in China, sending positive signals of economic warming, increasing demand, and enhanced business vitality.
The month-on-month rise in CPI and the expansion of its year-on-year increase result from the combined effect of multiple positive factors. From the "construction of a national unified market" to "anti-involution" policies and the "special action to boost consumption," a combination of macro-policies has been consistently effective, successfully stimulating market vitality and domestic demand potential.
In December last year, prices for communication devices, maternal and infant products, and recreational durable goods generally increased month-on-month, with rises ranging between 1.4% and 3.0%. The price of domestic gold jewelry surged by 5.6% month-on-month, reflecting both the concentrated release of residents' shopping and entertainment demand and a warming of consumer confidence.
More encouragingly, the core CPI, which excludes food and energy, rose by 1.2% year-on-year, maintaining a growth rate above 1% for the fourth consecutive month. The transmission of upstream raw material prices to downstream consumer goods is evident, with the price increase for household appliances widening to 5.9%. The price declines for fuel-powered and new energy passenger cars narrowed to 2.4% and 2.2%, respectively. This series of changes indicates that enterprises are no longer solely competing on price to gain volume; instead, market supply and demand are beginning to rebalance, continuously strengthening the momentum for business development.
Similarly noteworthy is the improved trend in the PPI for December 2025, which alleviates external concerns about the continued contraction of industrial profits. Once the price "anchor" stabilizes, it can create a positive feedback loop for corporate investment, employment, and credit.
Looking ahead to 2026, in the face of numerous external challenges, we must persist in efforts from both the supply and demand sides to achieve a dynamic balance between "stabilizing prices" and "promoting transformation." On one hand, precise macro-control is needed to stabilize market supply and ensure basic price stability. On the other hand, it is crucial to accelerate industrial transformation and upgrading, enhance the core competitiveness and risk resilience of enterprises, and promote high-quality economic development. This approach will allow prices to maintain their favorable trend of reasonable recovery.
As macro-policies continue to take effect, the CPI is expected to rise steadily. With the deepening of "anti-involution" policies, coupled with the rapid development of emerging industries and the effective release of consumption potential, the PPI will also enter a recovery cycle. This series of changes fills us with confidence for the future, as the promising picture of China's sustained economic improvement is gradually unfolding.
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