China’s consumer inflation edged up in November, offering a modest sign that the country’s long-running deflationary squeeze may be slowly easing even as deep structural pressures persist. According to figures released Wednesday by the National Bureau of Statistics, the consumer-price index rose 0.7% from a year earlier, accelerating from October’s 0.2% increase. The result was in line with the median projection of economists surveyed by Bloomberg, whose reporting forms the basis of these insights.
Producer prices, however, remained stuck in contraction. They fell 2.2% in November, marking the 38th consecutive month of declines and coming in slightly worse than expectations for a 2% drop. The ongoing slump reflects persistent oversupply in several sectors and continued reluctance among consumers to spend, forcing companies to slash prices to stay afloat.
China has grappled with deflationary pressures since the end of the pandemic, driven by a prolonged property downturn and muted household confidence. The glut of industrial capacity has amplified the issue, with firms cutting costs and margins in an environment of sluggish demand. The country’s GDP deflator — its broadest gauge of prices — has been in decline for more than two years, the longest stretch since quarterly data began in 1993.
Although Beijing has vowed to rein in what it calls “disorderly” price competition, meaningful progress has been limited amid fears that aggressive intervention could trigger job losses and further slow economic momentum. Even with China on track to hit its full-year growth target of around 5%, nominal GDP has been expanding more slowly, restrained by the drag of falling prices.
