On August 9, Dong Lijuan, Chief Statistician of the Urban Survey Department of the National Bureau of Statistics, interpreted the CPI and PPI data for July 2026.

In July, affected by international imported factors, the Consumer Price Index (CPI) fell by 0.1% month-on-month and rose by 0.5% year-on-year. The core CPI, which excludes food and energy prices, rose by 0.3% month-on-month and 0.9% year-on-year, and the CPI generally maintained a moderate increase. Domestic demand in some industries has increased, but affected by imported and seasonal factors, the Producer Price Index (PPI) for industrial products dropped by 0.7% month-on-month and rose by 3.5% year-on-year, a decrease of 0.6 percentage points from the previous month.

1. The month-on-month decline of CPI narrowed, and it rose moderately year-on-year

Month-on-month, the national CPI fell by 0.1%, a narrowing of the decline by 0.2 percentage points from the previous month. Fluctuations in international market prices dragged down domestic gasoline prices by 10.7%, an expansion of the decline by 5.8 percentage points from the previous month, which contributed about 0.35 percentage points to the month-on-month drop in CPI. Food prices remained flat with the previous month, 0.6 percentage points below the seasonal level. Among food items, fresh vegetable prices rose by 1.3% and egg prices fell by 2.1%, both significantly below seasonal levels; with a large supply of in-season fruits hitting the market, fresh fruit prices dropped by 3.8%, contributing about 0.07 percentage points to the month-on-month decline in CPI. The effects of the comprehensive regulatory policies on pig production capacity began to show, coupled with factors such as frequent extreme weather like high temperatures and heavy rainfall in some regions pushing up transportation costs, pork prices turned from a 0.8% drop the previous month to a 4.1% rise, contributing about 0.07 percentage points to the month-on-month increase in CPI. Artificial intelligence has driven the iterative upgrading of consumer electronic products, with increased demand and rising prices for related products; prices of tablet computers, computers and mobile phones rose by 11.3%, 5.5% and 1.0% respectively, collectively contributing about 0.03 percentage points to the month-on-month increase in CPI. Service prices turned from flat with the previous month to a 0.4% rise, contributing about 0.21 percentage points to the month-on-month increase in CPI. Among services, driven by increased summer travel demand, prices of travel agency services, hotel accommodation, air tickets and vehicle rentals rose by 7.2%, 6.5%, 4.2% and 3.6% respectively, collectively contributing about 0.10 percentage points to the month-on-month increase in CPI; with policy-induced price adjustments continuing to be rolled out in some regions, medical service prices rose by 1.1%, contributing about 0.07 percentage points to the month-on-month increase in CPI.

On a year-on-year basis, the national CPI rose by 0.5%, maintaining a moderate increase. The year-on-year CPI increase was 0.5 percentage points lower than the previous month, mainly due to the slowdown in the growth rate of gasoline prices. Gasoline prices rose by 1.0%, a decrease of 16.0 percentage points from the previous month, and their upward impact on the CPI was reduced by about 0.45 percentage points compared with the previous month, driving the growth rate of energy prices down to 0.6%. Excluding energy, the prices of industrial consumer goods rose by 1.5%, 0.2 percentage points lower than the previous month, contributing about 0.37 percentage points to the year-on-year CPI increase. Among them, the prices of gold jewelry, personal care products and household appliances rose by 24.6%, 1.7% and 0.2% respectively, with all growth rates slowing down, collectively contributing about 0.13 percentage points to the year-on-year CPI increase; the prices of computers, tablet computers and mobile phones rose by 17.4%, 17.2% and 8.5% respectively, with all growth rates expanding, collectively contributing about 0.14 percentage points to the year-on-year CPI increase. Service prices rose by 0.7%, 0.1 percentage points lower than the previous month, contributing about 0.36 percentage points to the year-on-year CPI increase. Among services, the price of medical services rose by 4.3%, an increase of 0.9 percentage points from the previous month, contributing about 0.28 percentage points to the year-on-year CPI increase; the prices of housekeeping services, catering services and educational services rose by 1.3%, 1.0% and 0.6% respectively, with overall stable growth rates. Food prices fell by 1.5%, a decrease of 0.1 percentage points from the previous month, contributing about 0.25 percentage points to the year-on-year CPI decline. Among food, pork prices fell by 13.3%, a decrease of 2.6 percentage points from the previous month, contributing about 0.25 percentage points to the year-on-year CPI decline; the price declines of fresh vegetables, fresh fruits, grain, edible oil and dairy products ranged from 0.3% to 1.5%; egg prices rose by 17.8%, a decrease of 2.2 percentage points from the previous month; the price increases of mutton, beef and poultry meat ranged from 1.6% to 6.2%.

II. The PPI fell month-on-month, and its year-on-year growth rate declined somewhat

Month-on-month, the national PPI fell by 0.7%, an expansion of 0.4 percentage points in the decline from the previous month. The main characteristics of the month-on-month movement of the PPI this month are as follows: First, imported factors have pushed down the prices of related domestic industries. The prices of oil and gas extraction, refined petroleum product manufacturing, and organic chemical raw material manufacturing fell by 11.8%, 8.4%, and 4.2% respectively; the prices of non-ferrous metal ore mining and dressing industry and non-ferrous metal smelting and rolling processing industry fell by 2.1% and 1.7% respectively. These five industries together contributed about 0.65 percentage points to the month-on-month decline in the PPI. Second, seasonal factors have caused price declines in some industries. In July, there were many high temperatures, heavy rains and typhoon weather, which slowed down the construction progress of construction projects. The prices of ferrous metal smelting and rolling processing industry and non-metallic mineral products industry fell by 0.8% and 0.5% respectively; hydropower and wind power generation increased, with prices falling by 10.3% and 3.9% respectively. These four industries together contributed about 0.11 percentage points to the month-on-month decline in the PPI. Third, industrial transformation and upgrading and the improvement and expansion of consumption have driven the increase in demand and prices of some industries. The growth of new driving forces has accelerated, and fields such as artificial intelligence, high-end equipment, and new materials have developed vigorously. The prices of intelligent unmanned aerial vehicle manufacturing, carbon new materials, and shipbuilding and related equipment manufacturing rose by 2.5%, 0.4%, and 0.3% respectively. The rapid growth of quality consumption has driven the prices of smart home consumer equipment manufacturing and skin care cosmetics manufacturing up by 3.4% and 0.7% respectively.

On a year-on-year basis, the national PPI rose by 3.5%, with the growth rate down by 0.6 percentage points from the previous month. By industry, among the major industries with price increases, the oil and natural gas extraction industry, petroleum, coal and other fuel processing industry, and chemical raw materials and chemical products manufacturing industry rose by 3.2%, 8.2% and 9.1% respectively; the non-ferrous metal ore mining and dressing industry and non-ferrous metal smelting and rolling processing industry rose by 22.6% and 20.2% respectively; the ferrous metal smelting and rolling processing industry rose by 2.7%. The growth rates of all these six industries declined compared with the previous month, and together they pushed up the year-on-year PPI increase by about 2.55 percentage points. The coal mining and washing industry rose by 27.1%, the electrical machinery and equipment manufacturing industry rose by 5.7%, and the computer, communication and other electronic equipment manufacturing industry rose by 4.4%. The growth rates of these three industries expanded compared with the previous month, and together they pushed up the year-on-year PPI increase by about 1.53 percentage points. The upward pull of these 9 industries on the PPI decreased by 0.56 percentage points compared with the previous month. The five industries that had the largest downward pull on prices were: the production and supply of electric power and heat power, automobile manufacturing, non-metallic mineral products, pharmaceutical manufacturing, and wine, beverage and refined tea manufacturing, with a decline range of 2.3% to 5.7%. Together, they dragged down the year-on-year PPI increase by about 0.76 percentage points, a decrease of 0.05 percentage points from the previous month.

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