China's CPI flat in 2025 amid price wars focus

TL;DR

China's CPI stayed flat at 0% year-on-year for full-year 2025, missing the 2% target.
Factory-gate PPI fell 2.6% in 2025, worsening from 2.2% drop in 2024; December CPI hit 0.8%.
Deflation risks persist, prompting Beijing to tackle price wars and boost domestic demand.

The story at a glance

China's National Bureau of Statistics released data showing consumer prices unchanged for 2025 overall, while producer prices dropped further amid ongoing price wars in key sectors. The NBS, under statistician Dong Lijuan, highlighted food price rises driving December's CPI uptick. This comes as Beijing steps up efforts against industrial overcapacity to stabilise the economy.

Key points

CPI for 2025: 0% year-on-year change, down from 0.2% rise in 2024 and below the March 2025 target of 2% growth.[[1]](https://www.scmp.com/economy/economic-indicators/article/3339263/chinas-consumer-prices-stay-flat-2025-amid-focus-price-wars-domestic-demand?onboard=true&firstTimeRegister=true)[[2]](https://www.scmp.com/economy/economic-indicators/article/3339263/chinas-consumer-prices-stay-flat-2025-amid-focus-price-wars-domestic-demand)
December 2025 CPI: +0.8% year-on-year, highest monthly rise since March 2023 and above Wind forecast of 0.75%.[[1]](https://www.scmp.com/economy/economic-indicators/article/3339263/chinas-consumer-prices-stay-flat-2025-amid-focus-price-wars-domestic-demand?onboard=true&firstTimeRegister=true)
Food prices in December: +1.1% year-on-year, up from +0.2% in November, main driver of CPI gain.
PPI for 2025: -2.6% year-on-year, steeper than -2.2% in 2024; December -1.9%, narrowing from November's -2.2% and beating Wind's -2% forecast.[[1]](https://www.scmp.com/economy/economic-indicators/article/3339263/chinas-consumer-prices-stay-flat-2025-amid-focus-price-wars-domestic-demand?onboard=true&firstTimeRegister=true)
PPI has declined for 39 straight months through December 2025.

Details and context

Beijing vowed in 2024 to fix excessive competition causing price wars, with 2025 actions intensifying to cut overcapacity and stabilise prices. The flat CPI signals weak consumer demand despite policy pushes, while deepening PPI falls show factory pressures from oversupply.

December's CPI lift came from holiday demand boosting food costs, but full-year flatness underscores deflationary trends needing more stimulus in 2026.

Core CPI details like pork (-6.1%) and fresh vegetables (-3.9%) drags were noted in related NBS briefings, aligning with the article's deflation focus.[[3]](http://english.scio.gov.cn/pressroom/node_9018332.html)

Key quotes

“The widening year-on-year increase of CPI in December was mainly driven by the faster rise in food prices,” NBS chief statistician Dong Lijuan.[[1]](https://www.scmp.com/economy/economic-indicators/article/3339263/chinas-consumer-prices-stay-flat-2025-amid-focus-price-wars-domestic-demand?onboard=true&firstTimeRegister=true)

Why it matters

Lingering deflation threatens sustained growth by curbing spending and investment in China's economy. Businesses face margin squeezes from price wars, while consumers see little inflation relief; investors watch for policy shifts. Monitor 2026 CPI/PPI data and capacity cuts, as rebound depends on demand boosts.

[[1]](https://www.scmp.com/economy/economic-indicators/article/3339263/chinas-consumer-prices-stay-flat-2025-amid-focus-price-wars-domestic-demand?onboard=true&firstTimeRegister=true)