China's inflation eased in November, with consumer prices growing at a slower rate and producer prices remaining in deflation, signaling subdued domestic demand despite ongoing government stimulus.
The consumer price index (CPI) rose 0.2% year-on-year, down from October’s 0.3% increase and below economists’ expectations of 0.5%, according to the National Bureau of Statistics. Meanwhile, the producer price index (PPI) dropped 2.5%, marking its 26th consecutive monthly decline, though it improved from October’s 2.9% drop. Consensus estimates suggested a 2.8% drop.
Food prices were a significant drag on inflation, with growth slowing to 1.0% in November from October’s 2.9% rise. Nonfood prices remained flat, while core CPI - which excludes volatile food and energy prices - edged up by 0.3%, slightly higher than October’s 0.2% increase. Analysts noted this uptick reflects modest support from stimulus measures, but structural issues like industrial overcapacity are expected to keep inflation low through 2025.
China’s property sector continues to weigh heavily on the economy. New home sales by the country’s top 100 developers fell 6.9% year-on-year in November, reversing a 7.1% gain in October and highlighting the ongoing downturn in real estate. Economists argue that more aggressive fiscal stimulus, including direct support for households and the property market, is needed to counter deflationary pressures. Previous incentives for upgrading home appliances and cars have had limited success.
With the potential for U.S. tariff hikes under a second Trump administration, attention is turning to the upcoming Central Economic Work Conference. Policymakers are expected to outline strategies to bolster domestic demand, which economists view as crucial for sustaining economic stability and reversing deflationary trends.