Latest official data reveals that in October 2026, China’s national Consumer Price Index (CPI) rose by 0.7% compared to the same month last year, falling short of market expectations which anticipated a 0.8% increase. This figure also represents a decline from September’s 0.9%, marking a three-month low.
A significant factor contributing to the overall CPI decline was the 2.9% year-on-year decrease in food prices. Additionally, the month-on-month CPI remained unchanged, contrasting with a 0.2% increase in the previous month. This stability indicates that the consumer market is still lacking in substantial pricing upward momentum.
As China’s economy continues to face persistent pressure, the growth of household income remains sluggish, leading to a lack of consumer confidence and a sustained downturn in domestic demand.
On November 9, the National Bureau of Statistics released data indicating that in October, the CPI rose by 0.7% year-on-year, a decline of 0.2 percentage points from the previous month and the lowest increase in three months. September’s CPI had increased by 0.9%, while August saw a rise of 0.8%.
Breaking down the data, urban CPI saw a year-on-year increase of 0.7%, while the rural CPI also increased by the same rate. Food prices, however, saw a decrease of 2.9%, while non-food prices increased by 1.5%. Consumer goods prices rose by 0.8%, and service prices increased by 0.7%.
The drop in food prices is a primary reason for the overall decline in price levels. In October, prices for food, tobacco, and dining out decreased by 1.6% compared to the previous year, contributing approximately 0.48 percentage points to the CPI decline.
Specifically, prices for fresh vegetables plummeted by 16.9%, impacting the CPI by around 0.31 percentage points. The prices of fresh fruits decreased by 3.8%, affecting the CPI by about 0.07 percentage points, while meat prices fell by 2.7%, contributing approximately 0.11 percentage points to the decline, with pork prices alone dropping by 8.6%. Conversely, egg prices rose by 10.1%, contributing approximately 0.05 percentage points to the CPI increase.
From a month-to-month perspective, the October CPI shifted from a 0.2% gain last month to a stable figure. Among the details, the prices of industrial consumer goods increased by 0.3%, while service prices went from a 0.2% decrease the previous month to a 0.1% increase. Food prices, on the other hand, shifted from a 0.4% increase last month to a decline of 1%.
The general decline in food prices reflects pressures on the market prices of certain everyday consumer goods. While monthly fluctuations can also be influenced by seasonal supply and demand factors, the broader trends in core inflation combined with overall consumption performance raise ongoing concerns regarding insufficient household demand.
In stark contrast to the declining CPI, China’s Producer Price Index (PPI) rose by 5.7% year-on-year in October, reaching its highest level since June 2022 and notably higher than September’s 5.0% rise, as well as surpassing market expectations of 5.3%.
This divergence between PPI and CPI underscores the structural challenges facing the Chinese economy. On one hand, rising international energy prices have led to increased production costs in sectors such as coal, oil, gas, and chemicals. On the other hand, insufficient domestic demand makes it difficult for enterprises to pass on rising upstream costs to consumers. The widening gap between production costs and final sale prices adds further pressure on business operations.
This situation illustrates that the challenges confronting the Chinese economy extend beyond merely expanding production and stimulating investment. There is also a pressing need to restore growth in household income, improve employment prospects, and re-establish consumer confidence in the future economic landscape.