Official data released by China’s National Bureau of Statistics on Sunday revealed a notable divergence between consumer and producer inflation in October, as upstream industrial costs climbed faster while household consumption remained moderate.
The country’s consumer price index (CPI) rose 0.7 percent year-on-year in October, a 0.2-percentage-point drop from September. Core CPI, which excludes volatile food and energy items, increased 0.8 percent from a year earlier. Food prices acted as the main drag on overall consumer inflation, offsetting modest gains in fuel and some consumer goods.
Meanwhile, the producer price index (PPI), which tracks prices of goods leaving factories, jumped 5.7 percent year-on-year, marking its highest reading in nearly four years and accelerating by 0.7 percentage points from the previous month. The pickup stemmed mainly from rising prices of coal, oil and other bulk commodities, pushing up costs for manufacturing and construction sectors.
The widening spread between PPI and CPI has drawn attention from economists. The gap suggests that cost pressures are building up at the production end but are not yet fully passed on to retail prices. Analysts say the split reflects uneven momentum across the economy: Industrial activity and infrastructure-related demand are firming, while household spending has yet to stage a stronger recovery.
Policymakers will continue monitoring price trends to balance supporting domestic demand and guarding against imported inflation risks. Stable supply of agricultural products and bulk commodities remains a priority to prevent excessive price swings. The central government has pledged to keep monetary policy accommodative where appropriate, while rolling out targeted measures to lift household income and consumer confidence in the final months of the year.
Market participants expect further policy fine-tuning in the coming weeks to stabilise growth, improve corporate profit margins and narrow the inflation divide between producers and consumers.