A breakdown of the CPI components illustrated where prices are firming and where they continue to soften. Food prices rose 0.2% year on year after falling 2.9% in October, partly because adverse weather disrupted the supply of fresh vegetables. Energy prices slid 3.4%, a steeper contraction than the previous month. Within consumer goods, home appliances prices increased 4.9% and clothing prices climbed 2%. Conversely, prices for gasoline-powered vehicles and new-energy vehicles declined 2.5% and 2.4%, respectively. Gold jewelry and accessories remained an outlier, surging 58.4% from a year earlier.
Economists cautioned that the uptick in headline CPI may overstate the underlying momentum. Some analysts noted that higher vegetable prices and unusually strong demand for gold inflated the figures, while broader consumption indicators still point to a cautious household sector contending with a protracted housing downturn and uneven labor market recovery. Goldman Sachs estimated that core CPI excluding gold posted a modest sequential slowdown between October and November.
On a month-over-month basis, CPI slipped 0.1%, missing expectations for a 0.2% rise. Price declines in hotels, airfares, transportation and travel services—sectors that benefited from an extended holiday period in October—contributed to the monthly drop.
The latest PPI data revealed persistent downward pressure across several heavy-industry segments. Prices in the coal mining and washing industry fell 11.8% year on year, while the oil and gas extraction sector recorded a 10.3% decrease. Ongoing excess production capacity in multiple manufacturing lines has forced firms to cut prices in order to preserve market share, compounding the deflationary environment.
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China’s broader growth picture remains uneven. Gross domestic product slowed to its weakest pace in a year during the third quarter, yet the country is still expected to achieve the government’s 2024 growth goal of “around 5%,” supported by strong merchandise exports. Customs data show China generated more than US$1 trillion in trade surplus during the first eleven months of the year, surpassing the record posted in 2024. Robust shipments to non-U.S. destinations helped offset the impact of persistent global trade tensions and rising protectionist measures.
At a recent Politburo meeting, senior officials listed expanding domestic demand and rebalancing supply among their main economic objectives for 2026. The statement signaled an ongoing easing bias but hinted that authorities remain cautious about deploying large-scale stimulus. Market participants now await the Central Economic Work Conference, expected in the coming days, for clearer guidance on growth targets and policy priorities for the coming year. The official objectives will be confirmed at the annual parliamentary session in March.
International organizations such as the International Monetary Fund have repeatedly emphasized that strengthening consumer confidence and resolving property-sector imbalances are critical for sustaining China’s recovery. Investors are watching for potential measures to address mortgage stress, local government debt risks and youth unemployment, all of which weigh on consumption patterns.
For the moment, the November inflation figures paint a split portrait: modest firming in consumer prices suggests some traction from targeted stimulus, yet deeper producer deflation points to lingering excess capacity and soft industrial demand. Until both indicators move decisively in tandem, analysts expect China’s economic recovery to proceed in fits and starts.
Crédito da imagem: Adek Berry / AFP via Getty Images
