Core Insights - China's Consumer Price Index (CPI) decreased by 0.3% year-on-year in September, with the decline narrowing by 0.1 percentage points from the previous month [1] - The core CPI, excluding food and energy prices, rose by 1.0% year-on-year, marking the first return to this level in nearly 19 months [1] - The primary factor for the year-on-year decline in CPI was the "tail effect," contributing approximately -0.8 percentage points, while new price changes contributed about 0.5 percentage points [1] CPI Breakdown - Food prices fell by 4.4% year-on-year, with this decline expanding by 0.1 percentage points from the previous month, impacting the CPI by approximately -0.83 percentage points [1] - Key food items such as pork, fresh vegetables, eggs, and fresh fruits saw price decreases, collectively affecting the CPI by about -0.78 percentage points [1] - The core CPI's year-on-year increase of 1.0% represents the fifth consecutive month of growth, with industrial consumer goods prices, excluding energy, rising by 1.8% [1] Monthly Trends - Month-on-month, the CPI shifted from flat in the previous month to an increase of 0.1% in September, slightly below seasonal levels due to declines in service and energy prices [1] - Service prices decreased by 0.3% month-on-month, influenced by the end of summer and the timing of the Mid-Autumn Festival, with airfare, hotel accommodation, and travel prices collectively impacting the CPI by about -0.17 percentage points [2] - Energy prices fell by 0.8% month-on-month, with domestic gasoline prices decreasing by 1.7% due to international oil price fluctuations [2] Economic Outlook - The chief economist at China Minsheng Bank noted a mild recovery in CPI this year, with a cumulative year-on-year decline of 0.1% over the first nine months, primarily due to food prices [2] - The overall weakness in energy prices is attributed to an oversupply in the international oil market [2] - As policies take effect and market supply-demand relationships improve, consumer goods and service prices are expected to stabilize and rise, with an anticipated year-on-year increase in CPI for the full year [2]