According to China’s National Bureau of Statistics, consumer price inflation has remained modest and remarkably stable for years. 12-month consumer price inflation slowed to 2.2 % in November. Core inflation (food and energy prices excluded) has long remained at around the 2 % level.
The pace of producer price growth continued to slow in November. Producer prices were up 2.7 % y-o-y, but were down slightly from October due to drops in energy and commodity prices.
China’s methodology for calculating consumer price inflation has been suspected for years to underestimate particularly housing costs. Even with the massive rent hikes recently in many cities, the consumer price index has only risen 2–3 %, even in China’s tier-one cities.
Price trends in China
Sources: Macrobond and BOFIT.