Key Events: China's November CPI rose 0.7% year-on-year, matching expectations, compared to 0.2% in October. PPI fell 2.2% YoY, slightly worse than the anticipated 2.0% decline and October's 2.1% drop.
Summary: November's CPI exceeded expectations with a YoY rebound. Global commodity prices showed an upward trend, while domestic demand-side prices improved as capacity management in key industries progressed, leading to gradual supply-demand balance restoration and short-term price increases. The PPI decline is expected to continue narrowing.
Service consumption stimulus policies and significant food price recovery drove November's CPI rebound. While China's seasonal consumption peak is ending and construction activity in real estate and infrastructure projects slows, weakening domestic demand, overseas demand remains supportive. Continued capacity optimization in key domestic industries is improving supply-demand fundamentals for certain goods, supporting price increases.
Internationally, OPEC+ production freeze and Russia-Ukraine peace talks temporarily lowered crude oil prices, while strong commodity demand and supply disruptions boosted non-ferrous metal prices. Overall, global commodity prices trended upward.
CPI rose 0.7% YoY (expected 0.7%) but fell 0.1% month-on-month (expected +0.2%). The YoY increase marked the highest since March 2024, primarily driven by food prices turning from decline to growth. Seasonal service price declines caused the monthly dip.
Food prices rose 0.2% YoY (from -2.9% in October), contributing +0.04 percentage points to CPI. Pork prices fell 15.0% (improving from -16.0%), dragging CPI down by 0.21 points, while fresh vegetable prices surged 14.5% (up 21.8 points), adding 0.31 points. Energy prices dropped 3.4% YoY, increasing their negative impact to 0.26 points.
Core CPI remained stable at 1.2% YoY, supported by rising raw material prices, consumption stimulus policies, and surging gold jewelry prices (up 58.4%, contributing 0.35 points). Non-food prices rose 0.8%, services gained 0.7%, and industrial goods (excluding energy) increased 2.1%. Home appliances and clothing rose 4.9% and 2.0% respectively, while fuel and new energy vehicle prices fell 2.5% and 2.4%.
PPI declined 2.2% YoY (expected -2.0%), with the drop widening slightly by 0.1 points from October. Monthly PPI rose 0.1%, marking two consecutive months of growth. Base effects, domestic supply-demand optimization, and global commodity price transmission influenced the results.
Internationally, crude prices fell while non-ferrous metals strengthened. Domestically, weak real estate and infrastructure investment contrasted with improving industrial capacity management, leading to mixed price movements. Coal mining (-3.8 points narrower decline), photovoltaic equipment (-2.0 points), and lithium battery manufacturing (-0.7 points) showed improvement, as did new energy vehicle manufacturing (-0.6 points).
Looking ahead, China's seasonal consumption peak is ending with continued weak domestic demand, though overseas demand provides support. Ongoing capacity optimization in key industries may further improve supply-demand balances and support prices. Global commodity prices remain elevated, suggesting potential for further PPI decline narrowing. With strengthened service consumption policies and improving food supply-demand dynamics, CPI recovery is expected to continue as high base effects fade.
(Note: All chart references and disclaimers from the original text have been retained but omitted in this rewrite for conciseness.)
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