China’s consumer inflation accelerated in December, with CPI rising from 0.7% to 0.8% yoy, above expectations of 0.6% and marking a 34-month high. The increase was driven mainly by food prices, as fresh vegetables surged 18.2% and beef prices rose 6.9%, supported by pre-New Year holiday demand.
However, price pressures remained uneven. Pork prices continued to fall sharply, down -14.6% yoy, while prices of gold jewelry jumped 68.5%, reflecting strong investment and gifting demand rather than broad-based consumption. According to National Bureau of Statistics, holiday shopping and supportive policies helped lift prices, but the improvement remains selective.
Looking beyond December, the broader deflationary challenge persists. Full-year CPI growth in 2025 was flat, the weakest in 16 years and well below policymakers’ “around 2%” target.
At the producer level, deflation moderated only slightly. PPI improved to -1.9% yoy in December from -2.2%, aided by rising non-ferrous metal prices and capacity discipline in key industries. Still, PPI fell 2.6% for the full year.
