China’s Consumer Prices Rise in December 2025
Consumer prices in China rose by 0.8% year-on-year in December 2025, marking the fastest growth in over two and a half years. Official data from the National Bureau of Statistics (NBS) released on Friday showed that the consumer price index (CPI) increased by 0.2% month-on-month in December, continuing the trend of moderate inflation.
Despite the uptick in December, overall inflation for the year remained unchanged. This marks the highest annual CPI growth since March 2023, driven largely by a rise in food prices, which increased by 1.1% year-on-year.
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Food Prices Drive CPI Growth
Dong Lijuan, chief statistician at the NBS, pointed to the increase in food prices as the main factor behind the accelerated CPI growth in December. The price of food has been a key driver of inflation in recent months, contributing to the overall rise in the cost of living.
Economists are cautiously optimistic about China’s inflation prospects for the coming year. Wen Bin, chief economist at China Minsheng Bank, predicts a recovery in consumer prices in 2026, thanks to policies aimed at boosting domestic demand, the progress of industrial construction, and efforts to optimize market competition and manage industry capacity.
Producer Price Index (PPI) Declines
In contrast to the consumer price index, China’s producer price index (PPI) showed a decline. The PPI, which measures costs for goods at the factory gate, fell by 2.6% year-on-year in 2025. In December alone, the PPI decreased by 1.9% compared to the same month in 2024. However, the downward trend has been narrowing, suggesting some stabilization in factory-level costs.
Dong noted that domestic macroeconomic policies have started to yield positive effects, with price changes improving in some sectors. While the decline in prices for certain industries continues, the development of a unified national market has helped slow the rate of decline.
Looking Ahead: Recovery Expected
Looking forward, economists remain hopeful about China’s economic recovery. Wen Bin’s forecast of a gradual recovery in consumer prices is aligned with expectations that key government policies will have a positive impact on domestic demand and industrial growth. These changes, coupled with efforts to enhance market competition, are expected to contribute to a more balanced inflationary outlook in the coming months.
