On 9/7, the National Bureau of Statistics of China (NBS) announced that the country's CPI in June increased by 0.1% year-on-year. This is the first increase in 5 months. Compared to the previous month, the CPI decreased by 0.1%. However, the rate of decline has slowed.
Gasoline and electric vehicle prices increased by 0.5% and 0.3% respectively compared to the previous month. High-tech sectors such as smart wearables, microwave communication equipment, aerospace equipment, and servers also recorded year-on-year increases.
Core CPI (excluding food and fuel prices) increased by 0.7% year-on-year. This is the highest increase in the past 14 months.
"Policies to stimulate domestic demand and promote consumption continued to be effective in June", commented Dong Lijuan, a senior expert at NBS.
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Customers at a food stall in Shanghai (China), 5/2025. Photo: Reuters |
Customers at a food stall in Shanghai (China), 5/2025. Photo: Reuters
The producer price index (PPI), which reflects prices at factories, fell by 3.6% year-on-year, suggesting deflationary pressures remain. However, NBS said prices in some areas have stabilized or begun to recover.
China has recently faced deflationary pressure due to weak domestic demand and oversupply in the industrial sector. Trade tensions further hinder manufacturers' ability to clear inventories.
In early May, Chinese financial authorities launched a series of measures to support the economy, such as lowering benchmark interest rates and reducing the reserve requirement ratio (RRR) for banks. The Chinese government has also implemented a series of other stimulus measures, including trade-in programs for cars, household appliances, and other items. However, this program has recently shown signs of stagnation.
Last week, at a meeting of the Central Financial and Economic Commission, senior Chinese leaders also pledged to address "disorderly price competition." The ongoing price war in the auto industry and the real estate crisis remain serious concerns for the government.
Ha Thu (according to CGTN, SCMP)
