Consumers shop for goods in a supermarket in Shijiazhuang, North China's Hebei Province. Photo: VCG

China's core consumer inflation extended its upward trend in August while factory-gate price declines eased, underscoring a steady recovery in market demand thanks to ongoing policy support, according to official data released on Wednesday by the National Bureau of Statistics (NBS).

The consumer price index (CPI) was unchanged from July and fell 0.4 percent from a year earlier. Excluding food and energy, the core CPI rose 0.9 percent year-on-year, marking the fourth consecutive month of acceleration, NBS said.

By category, urban consumer prices fell 0.3 percent and rural prices dropped 0.6 percent year-on-year. Food prices slid 4.3 percent while non-food prices rose 0.5 percent. 

Prices of consumer goods fell 1.0 percent, while service prices climbed 0.6 percent. On average, consumer prices in January-August were down 0.1 percent from a year earlier, per NBS.

On a month-on-month basis, overall CPI held steady in August. Urban prices were flat while rural prices edged up 0.1 percent. Food prices gained 0.5 percent, non-food prices slipped 0.1 percent, consumer goods rose 0.1 percent, and service prices were unchanged.

NBS chief statistician Dong Lijuan said the year-on-year CPI decline was mainly due to a higher base last year and weaker-than-seasonal food price increases in August. 

She noted that carry-over effects from last year's price changes dragged August CPI down by about 0.9 percentage points, an impact 0.4 points larger than in July. Meanwhile, new price gains were lower than the seasonal norm by roughly 0.3 points, leading to the overall decline.

Food remained a key drag. Pork, fresh vegetables and eggs saw year-on-year price drops of 16.1 percent, 15.2 percent and 14.2 percent respectively, with declines deepening from July. Fresh fruit prices reversed from a 2.8 percent rise in July to a 3.7 percent fall in August. Together, these four categories added about 0.47 percentage points more downward pressure on CPI than in the previous month, Dong said.

At the same time, policy-driven demand recovery continued to bolster underlying inflation, according to Dong. Core CPI growth accelerated for a fourth straight month, with industrial consumer goods excluding energy rising 1.5 percent from a year earlier, up 0.3 points from July. 

Among these, jewelry prices were a standout: gold jewelry surged 36.7 percent and platinum jewelry 29.8 percent, together adding about 0.22 percentage points to CPI. Prices of household appliances and recreational durable goods rose 4.6 percent and 2.4 percent respectively, contributing around 0.09 percentage points.

Meanwhile, factory gate prices showed signs of stabilization. The producer price index (PPI) was flat from July, ending eight straight months of sequential declines, while narrowing its year-on-year fall to 2.9 percent, compared to a 3.6-percent drop in July. This was the first time since March that the annual price decline had narrowed.

The improvement reflected both a lower comparison base and positive changes in certain sectors as macroeconomic policies took effect, the official said. 

More balanced supply-demand dynamics helped ease price drops in some industries, while emerging growth drivers helped boost prices in others. Rising demand for upgraded consumer goods also contributed to price gains in select sectors, Dong said.

Global Times