BeijingConsumer prices in China decreased at a sharp pace at 13 months in February, while producers’ prices continued, reflecting a decrease in seasonal demand and the ongoing consumer warned due to concerns about jobs and income.
Data of the National Bureau of Statistics showed that the Consumer Prices Index (CPI) decreased by 0.7 % in February compared to the same month last year, which reflected an increase of 0.5 % in January. This represents the first decrease in the consumer price index since January 2024 and was worse than the 0.5 % decrease that economists expected.
Food prices were a large driver, as it decreased by 3.3 % last month, a blatant contradiction with 0.4 % increase in January. The timing of the new lunar year, which occurred in late January this year, led to high food prices and increased prices of tourism services in January, but these effects faded by February.
On a monthly basis, the consumer price index decreased by 0.2 %, compared to a 0.7 % increase in January, and reduced the performance of the expected decrease of 0.1 %.
The basic inflation, which excludes the prices of food and fluctuating fuel, also decreased by 0.1 % in February, after an increase of 0.6 % in January.
To combat these challenges, the Chinese government has increased its allocation for consumer benefits, expanding support for electric cars, home appliances, and other goods to 300 billion yuan ($ 41.42 billion) in 2025. However, the most comprehensive measures to address problems related to China’s luxury are still in a state, left to consumers and medium commercial deposits to increase the Emiri consensus.
Be careful of the consumer is evident, as it increased by the individual’s spending during the holiday season by only 1.2 % over the previous year, according to Anz analysts.
The Minister of Commerce, Wang Weng, highlighted that the main issue of the Chinese economy is “the ability of weak consumption and preparation.” The recent government’s action report stressed the importance of consuming consumption, with a mention of 31 times, up from 21 last year.
Meanwhile, the PPI price index (PPI) also showed a 2.2 % decrease year on an annual basis in February, as it was slightly reduced from a 2.3 % decrease in January, but it still lacks an expected 2.1 % decrease. The threats of the continuous global tariffs and local industrial excessive capacity are pressure on Chinese exporters, forcing many to engage in price cuts and reduce wages to stay able to compete in international markets.
