Inflation in China Rises to Highest Level in 21 Months Supported by Improved Food Prices

According to TradingEconomics, China's annual inflation rate accelerated to 0.7% in November 2025, up from 0.2% in the previous month, aligning with market expectations, marking the highest level since February 2024. This rise reflects a significant improvement in price dynamics following a prolonged period of deflationary pressures.

Food prices increased for the first time in ten months by 0.2%, compared to a sharp decline of -2.9% in October, supported by rising prices of fresh vegetables and fruits and a slower decline in prices of meat, especially pork. Additionally, inflation in non-food items rose to 0.8%, bolstered by government "consumption replacement" programs aimed at boosting demand.

Prices for clothing (1.9% vs. 1.7%) and healthcare (1.6% vs. 1.4%) saw additional gains, while education prices remained stable at (0.8% vs. 0.9%). Conversely, housing prices remained stable after a slight increase in the previous month. In contrast, transportation costs fell at a faster pace to -2.3% compared to -1.5% in October.

Core inflation - which excludes food and energy prices - stabilized at 1.2% year-on-year, the highest level in 20 months, indicating that price momentum in core sectors is regaining strength.

On a monthly basis, consumer prices fell by 0.1%, contrary to analysts' expectations of a 0.2% increase, marking the first decline in five months, reflecting ongoing fluctuations in domestic demand despite improvements in annual indicators.