China’s Consumer Inflation Reaches Near Two-Year High as Producer Prices Keep Falling

China's consumer inflation climbed to a near two-year high in November, with consumer prices edging up 0.7% from a year earlier. However, producer price deflation deepened, with factory-gate prices falling 2.2% in November, extending the deflationary stretch into its fourth year. Core inflation, excluding food and energy, rose 1.2% year-on-year. The increase in consumer prices was led by higher food prices which rose 0.2%, while energy prices slid 3.4% from a year earlier. Economists warned that deflationary pressure remains entrenched in China's economy, citing weak demand conditions and excess production in several sectors. Prices for home appliances climbed 4.9% and clothing 2%, while gold accessories surged 58.4%. In contrast, gasoline-powered and new-energy vehicles prices dropped 2.5% and 2.4%, respectively. The Politburo has named expanding domestic demand and rebalancing supplies as top economic priorities for 2026.