China's consumer price index (CPI) declined 0.1% month-on-month in May, influenced by changes in energy and service prices. Meanwhile, the producer price index (PPI) continued its upward trend, driven by increased domestic demand in certain sectors and the transmission of international commodity price fluctuations, with prices in non-ferrous metals, electrical machinery, and computer-related industries rising due to factors including growing demand for computing power.
Data released by the National Bureau of Statistics on June 10 shows that in May, the CPI fell 0.1% compared to the previous month and rose 1.2% year-on-year. The core CPI, which excludes food and energy prices, increased by 1.1% year-on-year.
Analyst Dong Lijuan from the National Bureau of Statistics stated that, influenced by the transmission of international oil prices, domestic gasoline prices shifted from a 12.6% increase last month to a 0.3% decrease, causing energy prices to turn from a 5.7% rise last month to a 0.1% fall. This changed the impact on the CPI's month-on-month change from an upward pull of 0.39 percentage points last month to a downward pull of 0.01 percentage points. Due to a seasonal decline in travel after the May Day holiday, service prices shifted from a 0.5% increase last month to a 0.1% decrease, changing their impact on the CPI's monthly change from an upward pull of 0.22 percentage points to a downward pull of 0.03 percentage points.
The data also indicates that the PPI in May increased by 0.5% month-on-month and 3.9% year-on-year.
The National Bureau of Statistics noted that growth in computing power demand, among other factors, drove up prices in non-ferrous metals, electrical machinery, and computer-related industries. On a month-on-month basis, prices in the computer, communication, and other electronic equipment manufacturing industry rose by 0.6%, with prices for integrated circuit packaging and testing series and external storage devices and components increasing by 2.9% and 1.9%, respectively.
Key Insights on May's Price Data
In May, the overall operation of the consumer market remained stable. The CPI fell 0.1% month-on-month and rose 1.2% year-on-year, with the core CPI up 1.1% year-on-year. Influenced by increased demand in certain domestic sectors and the transmission of international commodity price fluctuations, the PPI rose 0.5% month-on-month and 3.9% year-on-year.
Consumer Price Index Overview
On a month-on-month basis, the national CPI fell 0.1%, compared to a 0.3% increase last month, primarily affected by changes in energy and service prices. The transmission of international oil prices led domestic gasoline prices to shift from a 12.6% increase last month to a 0.3% decrease, pulling energy prices down from a 5.7% rise to a 0.1% fall. The impact on the CPI's monthly change shifted from an upward pull of 0.39 percentage points to a downward pull of 0.01 percentage points. The seasonal post-holiday travel decline caused service prices to turn from a 0.5% increase to a 0.1% decrease, changing their impact from an upward pull of 0.22 percentage points to a downward pull of 0.03 percentage points. Within this, vehicle rental and airfare prices shifted from increases of 8.6% and 29.2% last month to decreases of 6.8% and 6.3%, together affecting the CPI's monthly decline by about 0.04 percentage points. The launch of new summer clothing lines drove apparel prices up 0.6%, while robust AI-related demand pushed prices for mobile phones and tablets up 1.6% and 1.1%, respectively. These three items together contributed to a CPI month-on-month increase of about 0.05 percentage points. Food prices fell 0.4%, with the rate of decline narrowing by 1.2 percentage points from last month, impacting the CPI's monthly decline by about 0.07 percentage points. Among foods, a large supply of seasonal vegetables led fresh vegetable prices down 3.6%, affecting the CPI's monthly decline by about 0.06 percentage points. Ample pork supply led to a price drop of 1.6%, though the rate of decline narrowed by 4.1 percentage points from last month, impacting the CPI's monthly decline by about 0.03 percentage points. Factors including a temporary tight supply, reduced egg-laying rates due to summer heat, and concentrated pre-holiday purchases for the Dragon Boat Festival pushed egg prices up 6.1%, affecting the CPI's monthly increase by about 0.03 percentage points.
On a year-on-year basis, the national CPI rose 1.2%, with the rate of increase unchanged from last month. Industrial consumer goods prices rose 3.9%, accelerating by 0.4 percentage points from last month, contributing about 1.18 percentage points to the CPI's year-on-year increase. Among industrial goods, due to a lower comparison base from the same period last year, gasoline price increases continued to widen to 23.5%, contributing about 0.66 percentage points to the CPI's year-on-year rise. The increase in gold jewelry prices continued to slow to 39.0%, contributing about 0.17 percentage points. Prices for household appliances and apparel rose 3.4% and 1.5%, respectively, together contributing about 0.12 percentage points. Service prices rose 0.8%, with the rate of increase slowing by 0.1 percentage points from last month, contributing about 0.40 percentage points. Within services, travel service prices rose 2.8%, with the rate of increase slowing by 0.9 percentage points, while price increases for other services were generally stable. Food prices fell 1.7%, with the rate of decline widening by 0.1 percentage points, contributing to a CPI year-on-year decrease of about 0.30 percentage points. Among foods, pork prices fell 16.1%, with the rate of decline widening by 0.9 percentage points, contributing to a CPI year-on-year decrease of about 0.31 percentage points. Fresh fruit prices fell 2.2%, contributing to a decrease of about 0.04 percentage points. Prices for eggs, mutton, beef, poultry, aquatic products, and fresh vegetables all rose, with increases ranging from 0.6% to 8.4%, together contributing to a CPI year-on-year increase of about 0.13 percentage points.
Producer Price Index Continues Upward Trend
On a month-on-month basis, the national PPI rose 0.5%, though the rate of increase slowed by 1.2 percentage points from the previous month. Key characteristics of the PPI's monthly performance include: First, industrial structure optimization and upgrading drove price increases in some sectors. Continued advancement in manufacturing equipment renewal pushed prices in the ferrous metal smelting and rolling processing industry up 1.2% month-on-month. Accelerated electrification and the deep integration of artificial intelligence across various fields, along with growing computing power demand, drove up prices in non-ferrous metals, electrical machinery, and computer-related industries. Prices in the non-ferrous metal smelting and rolling processing industry rose 1.1%, with prices for tin smelting and copper smelting up 4.8% and 3.1%, respectively. Prices in the computer, communication, and other electronic equipment manufacturing industry rose 0.6%, with prices for integrated circuit packaging and testing series and external storage devices and components up 2.9% and 1.9%, respectively. Prices in the electrical machinery and equipment manufacturing industry rose 0.5%, with prices for optical fiber manufacturing and wire and cable manufacturing up 8.0% and 1.2%, respectively. Second, seasonal demand increases drove up prices in some sectors. Coal stockpiling for peak summer demand and increased non-power coal use pushed prices in the coal mining and washing industry up 3.2% month-on-month. As temperatures gradually rose in May, prices for household air conditioner manufacturing and household refrigeration appliance manufacturing increased by 0.9% and 0.3%, respectively, while power supply prices rose 0.4%. Third, the transmission of international crude oil price fluctuations caused prices in related domestic industries to shift from increases to decreases or see slower growth. Oil extraction prices shifted from a 24.1% increase last month to a 1.8% decrease month-on-month. Refined petroleum product manufacturing prices shifted from a 19.0% increase to a 0.3% decrease. Prices in the raw chemical materials and chemical products manufacturing, chemical fiber manufacturing, and rubber and plastic products industries rose 2.0%, 1.5%, and 1.5%, respectively, with the rates of increase slowing by 6.3, 4.1, and 0.2 percentage points from the previous month.
On a year-on-year basis, the national PPI rose 3.9%, with the rate of increase widening by 1.1 percentage points from last month. Looking at specific industries, among those with price increases, the non-ferrous metal mining and dressing industry rose 36.5% year-on-year, the non-ferrous metal smelting and rolling processing industry rose 24.0%, the coal mining and washing industry rose 10.0%, the electrical machinery and equipment manufacturing industry rose 4.5%, the computer, communication, and other electronic equipment manufacturing industry rose 2.1%, and the ferrous metal smelting and rolling processing industry rose 1.0%. These six industries together contributed to a PPI year-on-year increase of about 2.56 percentage points, with their upward pull increasing by 0.51 percentage points from last month. The oil and natural gas extraction industry, the petroleum, coal and other fuel processing industry, and the raw chemical materials and chemical products manufacturing industry rose 35.7%, 18.4%, and 12.7%, respectively, together contributing to a PPI year-on-year increase of about 1.96 percentage points, with their upward pull increasing by 0.46 percentage points from last month. Among industries with price declines, the non-metallic mineral products industry fell 5.1%, the production and supply of electric power and heat power industry fell 4.4%, the automobile manufacturing industry fell 2.0%, and the agricultural and sideline food processing industry fell 1.4%. Together, these contributed to a PPI year-on-year decrease of about 0.75 percentage points, with their downward pull increasing by 0.01 percentage points from last month.
Annual and Cumulative Price Changes
In May, the national CPI rose 1.2% year-on-year. Urban areas saw a 1.3% increase, while rural areas saw a 1.1% increase. Food prices fell 1.7%, while non-food prices rose 1.9%. Consumer goods prices rose 1.6%, and service prices rose 0.8%. On average from January to May, the national CPI rose 1.0% compared to the same period last year.
In May, the national CPI fell 0.1% month-on-month. Both urban and rural areas saw a 0.1% decline. Food prices fell 0.4%, while non-food prices fell 0.1%. Consumer goods prices fell 0.2%, and service prices fell 0.1%.
Detailed Breakdown of Price Movements
In May, prices for food, tobacco, alcohol, and dining out fell 0.9% year-on-year, contributing to a CPI decrease of about 0.26 percentage points. Within food, livestock meat prices fell 7.4%, contributing to a decrease of about 0.31 percentage points, with pork prices down 16.1%, contributing to a decrease of about 0.31 percentage points. Fresh fruit prices fell 2.2%, contributing to a decrease of about 0.04 percentage points. Egg prices rose 6.6%, contributing to an increase of about 0.03 percentage points. Fresh vegetable prices rose 1.6%, contributing to an increase of about 0.02 percentage points. Aquatic product prices rose 0.6%, contributing to an increase of about 0.01 percentage points.
Among the other seven major categories, six saw year-on-year increases and one saw a decrease. Prices for other supplies and services, transportation and communication, and healthcare rose 9.9%, 5.4%, and 2.1%, respectively. Prices for household goods and services, clothing, and education, culture, and entertainment rose 1.8%, 1.4%, and 1.3%, respectively. Housing prices fell 0.2%.
In May, prices for food, tobacco, alcohol, and dining out fell 0.2% month-on-month, contributing to a CPI decrease of about 0.06 percentage points. Within food, fresh vegetable prices fell 3.6%, contributing to a decrease of about 0.06 percentage points. Livestock meat prices fell 0.8%, contributing to a decrease of about 0.03 percentage points, with pork prices down 1.6%, contributing to a decrease of about 0.03 percentage points. Egg prices rose 5.0%, contributing to an increase of about 0.03 percentage points. Fresh fruit prices rose 0.6%, contributing to an increase of about 0.01 percentage points.
Among the other seven major categories, one saw a month-on-month increase, two were flat, and four saw decreases. Clothing prices rose 0.6%. Prices for education, culture, and entertainment and healthcare were flat. Prices for household goods and services and other supplies and services both fell 0.4%. Prices for transportation and communication and housing fell 0.3% and 0.1%, respectively.
Producer Price Index Annual Change Widens
In May, the national PPI rose 3.9% year-on-year and 0.5% month-on-month. Industrial producer purchase prices rose 5.8% year-on-year and 1.3% month-on-month. On average from January to May, the PPI rose 1.0% compared to the same period last year, while industrial producer purchase prices rose 1.6%.
Analysis of Industrial Producer Price Changes
In May, within the PPI, producer goods prices rose 5.2% year-on-year, contributing about 4.08 percentage points to the overall PPI increase. Among these, mining industry prices rose 15.8%, raw materials industry prices rose 9.2%, and processing industry prices rose 2.3%. Consumer goods prices fell 0.8%, contributing to an overall PPI decrease of about 0.18 percentage points. Among these, food prices fell 1.8%, clothing and general daily-use goods prices both fell 1.0%, and durable consumer goods prices were flat.
Within industrial producer purchase prices, prices for non-ferrous metal materials and wires rose 22.0%, prices for chemical raw materials rose 11.8%, prices for fuel and power rose 10.0%, prices for textile raw materials rose 2.5%, and prices for ferrous metal materials rose 0.3%. Prices for building materials and non-metals fell 5.5%, and prices for agricultural and sideline products fell 1.6%.
In May, within the PPI, producer goods prices rose 0.7% month-on-month, contributing about 0.53 percentage points to the overall PPI increase. Among these, mining industry prices rose 1.5%, raw materials industry prices rose 0.9%, and processing industry prices rose 0.5%. Consumer goods prices were flat. Among these, food prices fell 0.1%, while clothing, general daily-use goods, and durable consumer goods prices all rose 0.1%.
Within industrial producer purchase prices, prices for chemical raw materials rose 4.2%, prices for fuel and power rose 2.7%, prices for textile raw materials rose 1.0%, prices for ferrous metal materials rose 0.6%, and prices for non-ferrous metal materials and wires and agricultural and sideline products both rose 0.3%. Prices for building materials and non-metals fell 0.5%.
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