On February 11, the National Bureau of Statistics released the national Consumer Price Index and Producer Price Index data using 2025 as the new base period. This marks the first data release following the latest base period rotation. Why is it necessary to conduct base period rotations for price indices? What new changes are involved in this rotation? An official from the Department of Urban Surveys of the National Bureau of Statistics provided explanations.
Base period rotation is a fundamental task in compiling price indices and is an international standard practice. According to statistical regulations, China's CPI and PPI undergo a base period rotation every five years. Starting in 2026, price indices will be compiled and published using 2025 as the base period.
The CPI is a relative number that comprehensively reflects price level changes of goods and services consumed by residents over a certain period. Since residents consume thousands of categories and varieties, a "fixed basket" of representative goods and services that are frequently consumed and significantly impact living standards is selected to represent overall price changes. As economic and social development progresses, consumption patterns evolve, requiring timely adjustments to the CPI's "fixed basket." For example, with increasing purchases of new energy vehicles in China, electricity for vehicles needs to be included in the CPI survey as energy for transportation. Base period rotation adjusts both the "fixed basket" and the price comparison base to better reflect current consumption patterns and accurately measure market price changes.
The base period rotation involves adjustments to the survey classification directory, survey outlets (enterprises), representative specifications, category weights, and the price comparison base period. This rotation adjusted the CPI survey classification directory based on actual conditions, maintaining 8 major categories and 268 basic classifications. New categories reflecting evolving consumption trends were added, including home security equipment, senior products, dishwashers, vehicle electricity, photography services, internet medical services, and medical aesthetic services, expanding coverage of new economic sectors. Additionally, the "Food, Tobacco, and Alcohol" category was renamed "Food, Tobacco, Alcohol, and Dining Out," while "Tourism" was renamed "Travel Agencies and Other Tourism Services." To better reflect overall travel consumption price changes, a new travel service price index was introduced, covering air tickets, train tickets, accommodation, vehicle rentals, and travel services.
Nationwide, the CPI survey now includes approximately 120,000 outlets and about 620,000 specifications, representing an expansion in coverage compared to the previous base period. To fully capture new consumption models, survey outlets now include membership-based supermarkets and instant retail platforms like flash sales, while new representative specifications include smart drones. Data collection methods were also optimized, with increased use of big data such as online transaction prices, enterprise electronic data, and administrative records.
Weight calculation is another crucial aspect of CPI base period rotation. CPI weights are determined following principles of objectivity, authenticity, and scientific rigor using internationally comparable methods. The weights for the eight major categories under the 2025 base period are as follows: Food, Tobacco, Alcohol, and Dining Out (29.5%), Clothing (5.4%), Housing (22.1%), Household Goods and Services (5.5%), Transportation and Communication (14.3%), Education, Culture, and Entertainment (11.4%), Health Care (8.9%), and Other Goods and Services (2.9%). Compared to the 2020 base period, overall category weight changes are minimal. Structurally, service weights increased while goods weights decreased, aligning with economic development trends and China's实际情况. Five categories saw weight increases: Food, Tobacco, Alcohol, and Dining Out; Transportation and Communication; Education, Culture, and Entertainment; Health Care; and Other Goods and Services.
When using CPI weights, it is important to distinguish between different comparison periods. CPI weights can be base period weights, month-on-month weights, or year-on-year weights, corresponding to fixed-base, month-on-month, and year-on-year indices. The released weights for 13 categories are base period weights for fixed-base indices. Monthly环比 and同比 weights automatically adjust based on price changes. For accurate analysis, such as measuring the impact of monthly pork price changes on the CPI环比 index,环比 weights should be used instead of base period weights to avoid偏差.
Base period rotation affects CPI and PPI data through changes in survey classification, outlets, specifications, and weights. However, the direction and magnitude of these influences vary. Comprehensive analysis shows that this rotation has an average impact of approximately 0.06 and 0.08 percentage points on monthly同比 indices for CPI and PPI respectively, indicating minimal overall effect.
Comments