China Producer Prices Rise for First Time in 3 Years

China’s producer prices rose 0.5% year-on-year in March 2026, beating expectations of a 0.4% gain and reversing a 0.9% decline in February. This marked the first increase since September 2022, ending its longest deflationary streak in decades, mainly driven by a sharp rise in global commodity prices, particularly energy, alongside improved supply-demand conditions in certain domestic industries. Prices rebounded for production materials (1.0% vs -0.7% in February), particularly in intermediate goods (2.0% vs -5.3%) and raw materials (1.1% vs -1.9%), while processed goods rose at a faster pace (0.9% vs 0.3%). Consumer goods deflation also eased (-1.3% vs -1.6%), with softer declines in food (-1.7% vs -1.8%), daily-use items (-1.4% vs -1.8%), and durable goods (-1.0% vs -1.6%). Meanwhile, clothing costs continued to drop (-1.1% vs -1.0%). On a monthly basis, producer prices rose 1.0%, the strongest since 2022, following gains of 0.4% in each of the previous two months.

China’s producer prices fell 0.9% year-on-year in February 2026, easing from a 1.4% decline in January and better than market expectations of a 1.1% drop. It marked the mildest decline since July 2024, buoyed by stronger prices in advanced and emerging sectors and by capacity management in key industries. Chinese Premier Li Qiang said that Beijing’s aim for “an appropriate rebound” in prices is one of the key considerations for monetary policy. Prices for production materials fell at a slower pace (-0.7% vs -1.3% in January), with deflation easing for raw materials (-1.9% vs -2%) and intermediate goods (-5.3% vs -8.1%), while prices recovered for processed goods (0.3% vs -0.4%). Consumer goods prices also declined more gradually (-1.6% vs -1.7%), particularly for clothing (-1.0% vs -0.7%), food (-1.8% vs -1.9%), and durable goods (-1.6% vs -1.8%), while deflation for daily-use items remained steady at 1.8%. On a monthly basis, producer prices stood at 0.4%, unchanged from January.

China’s producer prices dropped 1.4% year-on-year in January 2026, slowing from a 1.9% fall in December and extending the contraction to a 40th consecutive month. The latest reading was slightly below market expectations of a 1.5% fall, marking the mildest decline since July 2024, reflecting Beijing’s continued efforts to rein in excessive price competition. Production material prices fell much more slowly (-1.3% vs -2.1% in December 2025), with decreases softening in raw materials (-2.0% vs -2.6%) and processing (-0.4% vs -1.6%), while mining dropped at a faster pace (-8.1% vs -4.7%). Consumer goods prices declined at a faster pace (-1.7% vs -1.3%), driven by steeper falls in clothing (-0.7% vs -0.1%) and food prices (-1.9% vs -1.5%), while durable goods remained weak (-1.8% vs -3.5%). Also, the costs of daily-use goods fell faster (-1.8% vs 1.4%). Monthly, the PPI rose 0.4% in January, accelerating from a 0.2% rise in December, marking the fastest increase since September 2023.