SOURCE / ECONOMY
China's CPI rises 0.2% in December, up 2.5% over 2020
Published: Jan 11, 2021 12:58 PM

A vendor arranges vegetables at a farm product market in Dengqen County of Qamdo City, southwest China's Tibet Autonomous Region, Sept. 18, 2020. Through the cultivation of modern agriculture, vegetables are no more rarities on the "roof of the world," making today's Tibetan tables more delicious, nutritious. (Xinhua/Zhan Yan)



China's CPI, a main gauge of inflation, rose by 0.2 percent in Dec, compared with November's 0.5 percent drop,2020 CPI was 2.5 percent, according to data released by the National Bureau of Statistics on Monday.

In December, resulting from epidemic prevention and control measures and economic growth, consumer demand continued to grow. At the same time, affected by turbulent weather and rising costs, the CPI jumped from negative to positive territory, said NBS senior statistician Dong Lijuan on Monday.

Compared with the November, CPI moved from a 0.6 percent decline to an increase of 0.7 percent in December. Among the main drivers, food prices moved from a 2.4 percent drop in November to an increase of 2.8 percent, which affected the CPI increase by about 0.62 percentage point, said Dong.

Pork prices were up by 6.5 percent, compared with the 6.4 percent drop in November, affecting the CPI up by 0.28 percentage point, according to Dong.

Analyzing the breakdown, prices for both vegetables and fruits edged up 6.5 percent year-on-year in December, while beef and mutton gained 4.6 percent from a year earlier.

The rebound of the Chinese economy and heightened consumption pushed CPI upwards at the end of the year. In particular, the Double 12 online shopping festival and growing need to spend at the end of the year pushed consumer prices higher, analysts said.

Across the whole year of 2020, China's CPI rose 2.5 percent year-on-year, down from 2.7 percent in the first 11 months and staying within the government's annual target of around 3.5 percent.

China's Producer Price Index (PPI), which measures factory-gate prices, down 0.4 percent in December, narrowing from the 1.5 percent drop in November. 

In December, the steady recovery of domestic demand, coupled with the continued rise of prices for some international bulk commodities, led the prices of industrial products to continue to rise, statistician Dong Lijuan said.

In 2021, China's inflation will likely hold within a narrow range, with growth of Chinese economy to further accelerate and lead global economy, said a 2021 outlook report Standard Chartered sent to the Global Times.

However, analysts cautioned uncertainties remain, especially when sporadic outbreaks in certain Chinese cities, and the pandemic is still spreading violently in overseas countries. 

"Travel, transportation and catering industries will undergo another round of disruption if local authorities restrict movement during the holiday season," Dong Dengxin, director of the Financial Securities Institute at Wuhan University of Science and Technology, told the Global Times.

If the coronavirus situation worsens, it will be a drag on CPI and GDP growth, Dong said.


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