Core Insights - In November 2025, Shenzhen's Producer Price Index (PPI) increased by 1.3% year-on-year and 0.6% month-on-month, while the Industrial Producer Purchase Price decreased by 0.3% year-on-year and increased by 0.5% month-on-month [1] Group 1: Producer Price Index (PPI) Analysis - The average PPI from January to November showed a year-on-year increase of 0.2% [1] - The prices of production materials remained stable, with a notable decline in the mining industry by 6.5% and a slight decrease in raw materials by 0.4%, while processing industry prices increased by 0.1% [1] - Consumer goods prices rose by 3.8%, with durable goods prices decreasing by 2.1%, clothing prices down by 1.8%, food prices up by 1.3%, and general daily goods prices soaring by 25.9% [1] Group 2: Purchase Price Index Analysis - In the purchase price index, fuel and power prices fell by 6.7%, building materials and non-metallic prices decreased by 5.8%, and agricultural products prices dropped by 4.0% [1] - Other industrial raw materials and semi-finished products saw a decline of 3.4% [1] - Month-on-month, the purchase prices for textiles decreased by 0.5%, black metal materials fell by 0.4%, while other industrial raw materials and semi-finished products increased by 0.1%, and agricultural products rose by 0.2% [2]

Report Industry Investment Rating - Not provided in the report Core Viewpoints of the Report - The trend of China's PPI is determined by the combined effect of weight and price change of each category. The core drivers are upstream resource and basic material industries. Based on two prediction methods, the year-on-year decline of PPI in 2026 will narrow and turn positive in Q2 or Q3 [1][2] Summary by Relevant Catalogs 1. Basic Overview of China's PPI Data - China's PPI only measures industrial product prices, different from the US PPI which also covers services. It uses "dichotomy" and "industry method" classification systems. The PPI trend is mainly led by production materials. Both classification methods determine weights by sales output value, with a base period of 2020 [7][11][13] 2. Composition of PPI Weights and Core Driving Industries - PPI is calculated by weighted average of price indices of surveyed industries. Weights are estimated by "operating income" due to data limitations. Industries with high weights include computer, electrical machinery, etc. But industries with stable prices have limited impact on PPI. Upstream resources and basic materials are core drivers, like coal, oil, etc [16][20] - In October 2025, in PPI production materials, the year-on-year decline of mining was the largest; in PPI living materials, durable consumer goods had the largest decline. The current PPI decline is driven by international factors and supply - demand imbalance in some industries [22][24][26] 3. PPI Trend Calculation - One method is to estimate based on key industries. Assuming stable commodity prices in November 2025, PPI in 2026 will be driven by non - ferrous metals, coal, and black/chemical industries in sequence, and turn positive in Q2. The base effect in 2026 contributes significantly to the year - on - year recovery [28] - The second method is to calculate year - on - year from month - on - month. It is expected that the average monthly - on - monthly PPI in 2026 will be 0.02%, with an annual PPI of - 0.44% and a positive year - on - year reading in Q3 [30]

Core Viewpoint - The article discusses the recent trends in consumer prices and industrial producer prices in China, highlighting a decline in consumer prices and industrial producer prices, with specific emphasis on the impact of food prices on the Consumer Price Index (CPI) and the changes in various categories of goods and services [3][5][9]. Consumer Price Trends - In September 2025, the national consumer price index (CPI) decreased by 0.3% year-on-year, with urban areas seeing a decline of 0.2% and rural areas a decline of 0.5% [3]. - Food prices fell by 4.4% year-on-year, while non-food prices increased by 0.7% [3]. - The average CPI from January to September 2025 was down 0.1% compared to the same period last year [3]. Food Price Impact - In September, the prices of food, tobacco, and alcohol decreased by 2.6% year-on-year, contributing approximately 0.74 percentage points to the CPI decline [5]. - Specific food items such as fresh vegetables, eggs, and pork saw significant price drops of 13.7%, 11.9%, and 17.0% respectively, impacting the CPI by 0.35, 0.08, and 0.26 percentage points [5]. - Conversely, seafood prices increased by 0.9%, contributing 0.02 percentage points to the CPI [5]. Industrial Producer Price Trends - In September 2025, the industrial producer price index decreased by 2.3% year-on-year, with the decline rate narrowing by 0.6 percentage points compared to the previous month [9]. - The average industrial producer price from January to September 2025 was down 2.8% year-on-year [9]. Price Changes in Industrial Inputs - The prices of industrial producer inputs, such as fuel and power, decreased by 8.1%, while chemical raw materials and agricultural products also saw declines of 5.5% and 5.4% respectively [11]. - In September, the prices of industrial producer outputs remained stable, with production material prices unchanged [11]. - Year-on-year, the prices of production materials fell by 2.4%, with significant declines in mining and raw materials sectors [13].

Report Industry Investment Rating - Not provided in the given content Core Viewpoints of the Report - In July 2025, China's CPI and core CPI both rose 0.4% month - on - month, mainly due to seasonal factors. The PPI decreased 0.2% month - on - month, and industrial producer prices remained sluggish. China's overall economic activity expectations are in a moderate state, and the inflation level may continue to hover at a low level for some time [5][15]. Summary by Related Content CPI Situation - **Year - on - Year Data**: In July, the national CPI was flat year - on - year, against a market expectation of a 0.1% decline and a previous value of a 0.1% increase. From January to July, the average CPI decreased 0.1% compared with the same period last year. Food prices in July decreased 1.6% year - on - year, pulling down the CPI by about 0.29 percentage points. Non - food prices rose 0.3% year - on - year, core CPI rose 0.8% year - on - year, consumer goods prices decreased 0.4% year - on - year, and service prices rose 0.5% year - on - year [2][6]. - **Month - on - Month Data**: In July, CPI rose 0.4% month - on - month, mainly driven by the rise in service and industrial consumer goods prices. Food prices decreased 0.2% month - on - month, non - food prices rose 0.5% month - on - month, consumer goods prices rose 0.2% month - on - month, and service prices rose 0.6% month - on - month, affecting the CPI to rise by about 0.26 percentage points. Core CPI rose 0.4% month - on - month, mostly due to seasonal factors [3][7]. - **Eight - Category CPI**: In July, food and tobacco prices decreased 0.1% month - on - month, housing prices rose 0.1% month - on - month, transportation and communication prices rose 1.5% month - on - month, medical care prices rose 0.2% month - on - month, education, culture and entertainment prices rose 1.3% month - on - month, clothing prices decreased 0.3% month - on - month, daily necessities and services prices rose 0.8% month - on - month, and other supplies and services rose 0.9% month - on - month [8]. - **Future Outlook**: As of August 10, the agricultural product wholesale price 200 index was 113.96, lower than 126.50 in the same period last year. Agricultural product prices in July hovered at a low level and slightly increased in early August, but the increase rate was much lower than that of the same period last year. Agricultural product prices are unlikely to drive up the CPI in August [3][10]. PPI Situation - **Year - on - Year Data**: In July, the national PPI decreased 3.6% year - on - year, against a market expectation of a 3.4% decline. From January to July, the average PPI decreased 2.9% compared with the same period last year. Production material prices decreased 4.3% year - on - year, and living material prices decreased 1.6% year - on - year [3][11]. - **Month - on - Month Data**: In July, PPI decreased 0.2% month - on - month. Production material prices decreased 0.2% month - on - month, and living material prices decreased 0.2% month - on - month. Some industries with large month - on - month price declines included coal mining and washing, non - metallic mineral products, and ferrous metal ore mining. Industries with relatively large month - on - month price increases included oil and gas extraction, oil, coal and other fuel processing, and non - ferrous metal smelting and rolling [4][13]. - **Industry - Specific Analysis**: The price of the automobile manufacturing industry decreased 0.3% month - on - month, indicating continuous price competition pressure in the automobile industry [4][13]. PMI Situation - In July, the manufacturing PMI was 49.3%, remaining below the boom - bust line for the fourth consecutive month. The new order index was 49.4%, back in the contraction range. The production and operation activity expectation index was 52.6%. The service business activity index was 50.0%, down 0.1 percentage point from the previous month. The new order index was 46.3%, and the business activity expectation index was 56.6% [5][15].