The National Bureau of Statistics (NBS) has released data indicating that in May, the national Consumer Price Index (CPI) increased by 1.2% year-on-year, maintaining the same growth rate as the previous month, while showing a month-on-month decline of 0.1%. The national Producer Price Index (PPI) for industrial products rose by 3.9% year-on-year, an expansion of 1.1 percentage points from the previous month, with a month-on-month increase of 0.5%.
As the year-on-year increase in the PPI widens, a key question arises regarding the extent of upstream price pressures impacting downstream consumer goods prices. During a press conference, a spokesperson for the NBS addressed this, stating that despite the expansion in PPI growth, the overall operation of the CPI remains stable, with prices of essential consumer goods holding steady.
The spokesperson explained that the PPI reflects prices in the industrial production sector, while the CPI reflects prices in the residential consumption sector, covering all categories of consumer goods and services. Consequently, the transmission of PPI increases to the CPI is primarily concentrated within the industrial consumer goods segment. Prices for food and services, which constitute a significant portion of the CPI basket, are less affected by fluctuations in industrial goods prices.
The spokesperson further noted that China's economic operation is generally stable, with a resilient industrial and supply chain, and ample supply of goods and services. Various policies aimed at ensuring supply and stabilizing prices have been implemented effectively. In particular, the timely activation of a temporary regulatory mechanism for refined oil product prices has effectively cushioned the impact of international energy price volatility, providing strong support for maintaining stable domestic price levels.
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