In November, China witnessed a decline in both consumer prices and factory prices, attributed to decreasing commodity prices. Despite concerns raised by foreign media about deflation risks, China is actively implementing policies to bolster the real estate sector amid ongoing adjustments and foster broader economic recovery in the coming year, experts have stated.
According to data from the National Bureau of Statistics (NBS), China’s consumer price index (CPI), a key measure of inflation, registered a 0.5 percent year-on-year decrease in November and a 0.5 percent decline from October, primarily influenced by a drop in energy prices.
Factors contributing to the decline in November’s CPI included fluctuations in food and energy prices, with core CPI—excluding food and energy—remaining stable, showing a 0.6 percent year-on-year increase, consistent with the previous month.
The producer price index (PPI) experienced a 3 percent year-on-year decrease in November, impacted by the decline in international oil prices and weakened demand in certain industrial product markets, according to the NBS.
Veteran economist Tian Yun highlighted that the persistent risk of external deflationary pressure, influenced by a reduction in the US Federal Reserve’s balance sheet, contributed to the broad decline in commodity prices, especially oil and agricultural products.
While the real estate sector historically played a significant role in stimulating domestic demand, ongoing structural adjustments in the sector have dampened its robust impact on economic recovery. China’s manufacturing industry recorded a Purchasing Manager Index (PMI) of 49.4 percent in November, indicating challenges in achieving further economic recovery.
To address this, China is intensifying support for the real estate sector to stabilize future development expectations. As economic policies for the upcoming year return to an expansionary range, experts anticipate the gradual manifestation of positive effects on the economy.