BEIJING, China — China’s consumer inflation accelerated unexpectedly in November 2025, reaching the fastest pace in nearly two years. Official data released Wednesday showed the Consumer Price Index (CPI), the primary gauge of inflation, climbing notably, primarily driven by surging food costs. This uptick underscores growing traction in domestic demand, bolstered by ongoing government stimulus, even as factory-gate prices showed tentative signs of bottoming out.
The National Bureau of Statistics (NBS) reported that the CPI grew by 0.7% year-on-year (YoY) in November. This figure marks a significant increase from the 0.2% rise recorded in October and represents the fastest growth rate since March 2024.
The acceleration was largely attributed to a turnaround in food prices. According to NBS statistician Dong Lijuan, food costs rebounded by 0.2% in November after declining 2.9% in October. A key contributor was fresh vegetables, whose prices surged 14.5% year-on-year, breaking a nine-month period of decline.
Demand Policies Fuel Core Inflation
Beyond volatile food and energy, government measures aimed at boosting internal demand continued to influence price stability. The core CPI, which excludes food and energy prices and provides a clearer picture of underlying demand, held steady, rising 1.2% year-on-year in November, matching the previous month’s increase.
Specific sectors directly impacted by consumption policies witnessed marked price hikes. The NBS data indicated prices for home appliances and clothing rose by 4.9% and 2.0% year-on-year, respectively. Conversely, energy prices declined 3.4% from a year earlier, a steeper dip than in October. Despite the broad increase in November, the average CPI for the first 11 months of 2025 remained flat compared with the same period a year earlier.
Factory Deflation Narrows Amid Stabilization
While consumer inflation accelerated, the Producer Price Index (PPI), which tracks wholesale costs for goods leaving the factory gate, continued its stretch of decline. The PPI fell 2.2% year-on-year in November, slightly widening from the 2.1% drop in October, largely due to a higher comparative basis in the previous year.
Crucially, however, signs of industrial stabilization emerged on a month-over-month basis. The PPI edged up 0.1% sequentially in November, marking the second consecutive monthly gain. This modest increase suggests that macro policies designed to support the industrial sector, including efforts to reduce excess production capacity and curb disorderly competition, are beginning to take effect. Specific improvements were noted in sectors such as coal mining, solar equipment, and lithium-ion batteries, where price declines narrowed.
Economic Outlook and Policy Direction
The positive inflation figures arrive as Chinese authorities affirm confidence in meeting the year’s key economic objectives. The economy previously expanded 5.2% year-on-year in the first three quarters, positioning the country to achieve its annual GDP growth target of around 5% for 2025.
Looking ahead to 2026, policymakers are signaling a shift toward more robust intervention. A recent meeting of the Political Bureau of the Communist Party of China Central Committee emphasized the need for more proactive, effective, and forward-looking macro policies. The consensus is to strengthen domestic demand and improve supply quality to ensure sustainable growth.
Wen Bin, Chief Economist at China Minsheng Bank, projects that as policies aimed at expanding domestic demand fully materialize, China is likely to experience a “mild price recovery” throughout the next calendar year, providing a firmer foundation for economic rebound. This suggests the recent uptick in CPI may signal the beginning of a larger trend toward economic normalization and stability.