{"id":1761,"date":"2025-01-09T11:10:47","date_gmt":"2025-01-09T16:10:47","guid":{"rendered":"https:\/\/thetimesfinancial.com\/?p=1761"},"modified":"2025-01-09T11:10:48","modified_gmt":"2025-01-09T16:10:48","slug":"chinas-consumer-prices-barely-rise-in-2024-amid-persistent-weak-demand","status":"publish","type":"post","link":"https:\/\/thetimesfinancial.com\/?p=1761","title":{"rendered":"China\u2019s Consumer Prices Barely Rise in 2024 Amid Persistent Weak Demand"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\">Weak Inflation Highlights Demand Challenges<\/h2>\n\n\n\n<p>China\u2019s <strong>consumer prices<\/strong> barely increased in 2024, while <strong>factory-gate prices<\/strong> continued to decline for a second consecutive year, reflecting <strong>persistently weak domestic demand<\/strong>, according to official data released on Thursday by the <strong>National Bureau of Statistics<\/strong>.<\/p>\n\n\n\n<p>Key figures include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Consumer Price Index (CPI):<\/strong> Up <strong>0.2%<\/strong> for the year, matching the previous year\u2019s pace and falling far below the official target of <strong>3%<\/strong>, marking the 13th consecutive year inflation missed its goal.<\/li>\n\n\n\n<li><strong>December CPI:<\/strong> Increased just <strong>0.1%<\/strong> year-on-year, down from November\u2019s <strong>0.2%<\/strong>, and the slowest pace since April.<\/li>\n\n\n\n<li><strong>Core Inflation:<\/strong> Excluding volatile food and fuel prices, it rose to <strong>0.4%<\/strong> in December, the highest in five months.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Deflationary Pressures in Factory Prices<\/h2>\n\n\n\n<p>Upstream, the <strong>Producer Price Index (PPI)<\/strong> showed continued deflation:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>December PPI:<\/strong> Fell <strong>2.3%<\/strong> year-on-year, a slower decline than November\u2019s <strong>2.5%<\/strong> and better than the expected <strong>2.4%<\/strong> drop.<\/li>\n\n\n\n<li>Factory-gate prices have remained deflationary for <strong>27 straight months<\/strong>, highlighting sustained economic headwinds.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Stimulus Provides Temporary Relief<\/h2>\n\n\n\n<p>Economists believe policy stimulus measures are offering temporary support:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Julian Evans-Pritchard<\/strong>, Head of China Economics, noted that stimulus is helping demand and prices, but warned that the effects are likely to be short-lived.<\/li>\n\n\n\n<li><strong>Zhang Zhiwei<\/strong>, President of Pinpoint Asset Management, emphasized that the <strong>property sector downturn<\/strong> continues to weigh heavily on consumer sentiment.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Broader Deflationary Trends<\/h2>\n\n\n\n<p>A prolonged <strong>electric vehicle price war<\/strong>, now in its third year, has extended discounting across the <strong>retail sector<\/strong>, including <strong>bubble tea shops<\/strong> and other discretionary goods.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Increasingly cautious consumers are opting to <strong>rent items<\/strong>, such as cameras and handbags, rather than making purchases.<\/li>\n\n\n\n<li>\u201cThe deflationary pressure is persistent,\u201d Zhang added, emphasizing the need for effective fiscal policies to stimulate recovery.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Government Actions to Spur Growth<\/h2>\n\n\n\n<p>China is ramping up fiscal stimulus to counter these challenges:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Record Treasury Bonds:<\/strong> Beijing has agreed to a record <strong>$411 billion<\/strong> in special treasury bond issuance to revive the economy.<\/li>\n\n\n\n<li><strong>Ultra-Long Treasury Bonds:<\/strong> Additional funding is expected in <strong>2025<\/strong> to support <strong>business investment<\/strong> and <strong>consumer-boosting initiatives<\/strong>.<\/li>\n\n\n\n<li><strong>Targeted Funding:<\/strong> Authorities have allocated <strong>$41 billion<\/strong> from government bonds to finance <strong>equipment upgrades<\/strong> and <strong>consumer goods trade-ins<\/strong>, including autos.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Outlook for 2025<\/h2>\n\n\n\n<p>While the <strong>World Bank<\/strong> recently upgraded China\u2019s economic growth forecast for <strong>2024 and 2025<\/strong>, it warned that subdued household and business confidence, alongside property sector struggles, would remain significant drags.<\/p>\n\n\n\n<p>Despite stimulus measures, many economists predict that underlying inflation will weaken again later in the year, with the effectiveness of fiscal policy determining the long-term outlook.<\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Weak Inflation Highlights Demand Challenges China\u2019s consumer prices barely increased in 2024, while factory-gate prices continued to decline for a second consecutive year, reflecting persistently weak domestic demand, according to official data released on Thursday by the National Bureau of Statistics. Key figures include: Deflationary Pressures in Factory Prices Upstream, the Producer Price Index (PPI) [&hellip;]<\/p>\n","protected":false},"author":10772,"featured_media":1762,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":{"0":"post-1761","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-finance"},"_links":{"self":[{"href":"https:\/\/thetimesfinancial.com\/index.php?rest_route=\/wp\/v2\/posts\/1761","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thetimesfinancial.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thetimesfinancial.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thetimesfinancial.com\/index.php?rest_route=\/wp\/v2\/users\/10772"}],"replies":[{"embeddable":true,"href":"https:\/\/thetimesfinancial.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1761"}],"version-history":[{"count":1,"href":"https:\/\/thetimesfinancial.com\/index.php?rest_route=\/wp\/v2\/posts\/1761\/revisions"}],"predecessor-version":[{"id":1763,"href":"https:\/\/thetimesfinancial.com\/index.php?rest_route=\/wp\/v2\/posts\/1761\/revisions\/1763"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thetimesfinancial.com\/index.php?rest_route=\/wp\/v2\/media\/1762"}],"wp:attachment":[{"href":"https:\/\/thetimesfinancial.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1761"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thetimesfinancial.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1761"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thetimesfinancial.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1761"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}