According to a report by China Daily on March 9th…
China’s consumer inflation accelerated to its fastest pace in three years in February, while the decline in factory-gate prices continued to ease, signaling a gradual recovery in domestic demand.
Data released by the National Bureau of Statistics of China showed that the country’s consumer price index (CPI) rose 1.3 percent year-on-year in February, up from 0.2 percent in January, marking the highest level since January 2023.
According to Dong Lijuan, a statistician at the statistics bureau, the increase was partly due to the timing of the Chinese New Year holiday, which occurred later this year compared with 2025. The shift boosted travel and consumption activity during the month.
Services Drive Price Growth
Service prices recorded the most notable increase, rising 1.6 percent year-on-year in February after a 0.1 percent increase in January. The rise contributed roughly 0.75 percentage points to the overall CPI growth.
Travel-related services saw particularly strong price increases as holiday demand surged. Airfares rose 29.1 percent, while car rental prices increased 19.8 percent and travel agency fees climbed 12.5 percent. Hotel accommodation prices also rose 5.4 percent.
Other service sectors also saw steady increases. Prices for pet services rose 13 percent, vehicle repair and maintenance increased 12 percent, while housekeeping services and takeaway food prices rose 6.3 percent and 5.6 percent, respectively.
Food Prices Rebound
Food prices also returned to growth in February, rising 1.7 percent year-on-year, compared with a 0.7 percent decline in January.
Prices of fresh vegetables, beef, lamb and fresh fruits increased between 5.9 percent and 10.9 percent, collectively contributing around 0.41 percentage points to CPI growth.
On a month-on-month basis, consumer prices rose 1 percent in February, the fastest increase in nearly two years.
Meanwhile, core CPI, which excludes food and energy prices and is often seen as a better indicator of underlying demand conditions, rose 1.8 percent year-on-year, compared with 0.8 percent in January.
Factory Price Pressures Ease
At the producer level, deflationary pressures continued to moderate.
China’s producer price index (PPI), which measures prices at the factory gate, fell 0.9 percent year-on-year in February, narrowing from a 1.4 percent decline in January.
The statistics bureau said macroeconomic policy support and improvements in market conditions helped stabilize prices in several industries.
Price increases were also reported in some emerging sectors linked to the country’s push to build a modern industrial system, including industries associated with China’s “Artificial Intelligence Plus” initiatives.
On a monthly basis, factory prices rose 0.4 percent, unchanged from the previous month.
Gradual Demand Recovery
The latest inflation data suggests that China’s domestic demand is gradually improving after a period of weak price growth.
Rising service prices, stronger holiday consumption and improving industrial price trends indicate a modest recovery in economic activity as policymakers continue efforts to support growth and stabilize the economy.