Data is here: China December CPI +0.1% y/y (expected +0.1%, prior +0.
2%) Recap (summary of a Reuters report): Consumer Price Index: China's CPI rose by 0.2% in 2024, matching the previous year's growth and falling well below the 3% target. December CPI increased by 0.
1% year-on-year, slowing from 0.2% in November and marking the weakest pace since April. Core inflation, excluding food and fuel, edged up to 0.
4% in December, the highest in five months. Producer Price Index: Factory-gate prices declined for the 27th consecutive month, with the PPI falling 2.3% in December year-on-year, an improvement from November's 2.
5% decline. Economic Challenges: Persistent weak domestic demand is driven by: Job insecurity. A prolonged housing market downturn.
High debt levels. Uncertainty over U.S.
trade policies under President-elect Donald Trump. Discounting is widespread across retail sectors, including items like bubble tea and luxury goods, while consumers increasingly rent instead of purchasing discretionary items. Stimulus Measures: Policy stimulus has provided temporary support to demand and prices, but analysts expect its effects to fade, with inflation likely to weaken later in 2025.
Beijing has ramped up fiscal measures, including: A record $411 billion in special treasury bond insurance. Plans for substantial funding from ultra-long treasury bonds in 2025. $41 billion allocated for equipment upgrades and consumer goods trade-ins, including vehicles.
Analyst Outlook: Economists .
