China's Consumer Price Index (CPI) rose by 0.8% year-on-year in December, compared to a 0.7% increase in the previous month. The Producer Price Index (PPI) fell by 1.9% year-on-year, following a 2.2% decline in November.
Dong Lijuan, Chief Statistician of the Urban Department at the National Bureau of Statistics, interpreted the CPI and PPI data for December 2024.
In December, as policies and measures to expand domestic demand and promote consumption continued to take effect, coupled with the approach of the New Year's Day holiday boosting consumer demand, the Consumer Price Index (CPI) increased by 0.2% month-on-month and 0.8% year-on-year. The core CPI, which excludes food and energy prices, rose by 1.2% year-on-year. Influenced by factors such as the transmission of international commodity prices and the ongoing effects of policies related to capacity management in key domestic industries, the Industrial Producer Price Index (PPI) increased by 0.2% month-on-month but fell by 1.9% year-on-year.
The month-on-month CPI turned from a 0.1% decline in the previous month to a 0.2% increase, primarily driven by rising prices of industrial consumer goods excluding energy. Prices for industrial consumer goods excluding energy rose by 0.6%, contributing approximately 0.16 percentage points to the month-on-month CPI increase. Among these, the effects of consumption-boosting policies continued to manifest, and with the New Year holiday approaching, increasing demand for shopping and entertainment led to price increases for communication devices, maternal and infant products, recreational durable goods, and household appliances, with gains ranging between 1.4% and 3.0%. Influenced by rising international gold prices, the price of domestic gold jewelry increased by 5.6%. Energy prices fell by 0.5%, with domestic gasoline prices dropping by 1.2% due to changes in international oil prices, contributing about a 0.04 percentage point decline to the month-on-month CPI. Food prices rose by 0.3%, contributing approximately 0.05 percentage points to the month-on-month CPI increase. Specifically, pre-holiday consumption demand increased, pushing up prices for fresh fruits and shrimp/crab by 2.6% and 2.5%, respectively. Due to relatively favorable weather conditions, the price of fresh vegetables increased by 0.8%, a rate 3.3 percentage points lower than the seasonal average. With hog capacity remaining ample, pork prices fell by 1.7%.
The CPI increased by 0.8% year-on-year, a rate 0.1 percentage points higher than the previous month, marking the highest level since March 2023. The expansion in the year-on-year increase was mainly driven by a larger rise in food prices. Food prices rose by 1.1%, an increase 0.9 percentage points greater than the previous month, contributing about 0.17 percentage points more to the year-on-year CPI increase compared to November. Within the food category, the price increases for fresh vegetables and fresh fruits expanded to 18.2% and 4.4%, respectively, together contributing about 0.16 percentage points more to the year-on-year CPI increase than last month. Prices for beef, mutton, and aquatic products rose by 6.9%, 4.4%, and 1.6%, respectively, with all seeing expanded increases. Pork prices fell by 14.6%, though the rate of decline narrowed slightly. Energy prices fell by 3.8%, with the rate of decline expanding by 0.4 percentage points from the previous month; gasoline prices fell by 8.4%, an expanded decline. The core CPI, which excludes food and energy, rose by 1.2% year-on-year, maintaining an increase above 1% for the fourth consecutive month. Service prices increased by 0.6%, contributing about 0.25 percentage points to the year-on-year CPI increase. Among services, prices for household services rose by 1.2%, while rental prices fell by 0.3%. Prices for industrial consumer goods excluding energy rose by 2.5%, contributing approximately 0.63 percentage points to the year-on-year CPI increase. Specifically, the price increase for gold jewelry expanded further to 68.5%; price increases for household appliances and daily household necessities widened to 5.9% and 3.2%, respectively; the price declines for fuel-powered cars and new energy vehicles narrowed to 2.4% and 2.2%, respectively.
The PPI increased by 0.2% month-on-month, marking the third consecutive month of increase, with the rate of growth expanding by 0.1 percentage points from the previous month. The main characteristics of the month-on-month PPI performance this month were: First, improved supply and demand dynamics drove price increases in some industries. The continued effectiveness of comprehensive measures for capacity management in key industries and the regulation of market competition order led to price increases in coal mining and washing, and coal processing, which rose by 1.3% and 0.8% month-on-month, respectively, for the fifth consecutive month. Lithium-ion battery manufacturing prices increased by 1.0%, and cement manufacturing prices rose by 0.5%, both rising for the third consecutive month. New energy vehicle manufacturing prices turned from a 0.2% decline last month to a 0.1% increase. Seasonal demand increases drove prices in gas production and supply, and production and supply of electric power and heat, up by 1.2% and 1.0%, respectively. Prices for down processing and wool textile dyeing and finishing increased by 1.2% and 1.0%, respectively. Second, imported factors led to divergent price trends in domestic non-ferrous metals and petroleum-related industries. Rising international non-ferrous metal prices drove month-on-month price increases of 3.7% and 2.8% in domestic non-ferrous metal mining and dressing, and non-ferrous metal smelting and pressing, respectively. Specifically, prices for silver smelting, gold smelting, copper smelting, and aluminum smelting rose by 13.5%, 4.8%, 4.6%, and 0.9%, respectively. Falling international crude oil prices led to declines of 2.3% and 0.9% in domestic petroleum extraction and refined petroleum product manufacturing prices, respectively.
The PPI fell by 1.9% year-on-year, with the rate of decline narrowing by 0.3 percentage points from the previous month. The continued effectiveness of various domestic macroeconomic policies led to positive changes in prices for some industries. First, the deepening advancement of the national unified market construction led to a continued narrowing of the year-on-year price declines in related industries. With the continuous optimization of market competition order, the year-on-year price declines for coal mining and washing, lithium-ion battery manufacturing, and photovoltaic equipment and component manufacturing narrowed by 2.9, 1.2, and 0.4 percentage points, respectively, compared to the previous month, marking the fifth, fourth, and ninth consecutive months of narrowing, respectively. Second, the cultivation and growth of new quality productive forces drove year-on-year price increases in related industries. The robust development of industries related to the digital economy, rapid growth in the production of new raw materials and new materials, and the continuous empowerment of development through green transformation led to price increases: external storage devices and components rose by 15.3%, biomass liquid fuels increased by 9.0%, graphite and other carbon product manufacturing rose by 5.5%, finished integrated circuit prices increased by 2.4%, the comprehensive utilization of waste resources industry saw a 0.9% price increase, and service consumer robot manufacturing prices rose by 0.4%. Third, the effective release of consumption potential drove year-on-year price increases in relevant industries. The in-depth implementation of special campaigns to boost consumption, along with relatively rapid growth in cultural, sports, and quality-oriented consumption, led to price increases: manufacturing of arts, crafts, and ceremonial articles rose by 23.3%, manufacturing of sports balls increased by 4.0%, manufacturing of traditional Chinese musical instruments rose by 2.0%, and manufacturing of nutritional foods increased by 1.5%.
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