Pedestrians walk past an Apple Store at the Taikoo Li Sanlitun shopping complex on Aug. 22, 2026, in Beijing, China.
Cheng Xin | Getty Images
China’s consumer and wholesale inflation rebounded in August, as higher global commodity costs and surging high-tech demand cushioned persistently tepid domestic consumption.
The producer price index increased 3.8%, according to data released by the National Bureau of Statistics on Wednesday, exceeding economists’ forecast for a 3.6% gain and outpacing July’s 3.5%, the weakest in three months.
Much of the pickup reflects a favorable base-effect comparison and higher commodity costs, economists said, rather than a genuine strengthening in household demand, which has stayed soft as effects from Beijing’s trade-in subsidies and other consumption-boosting measures fade. The Iran war has sent oil prices surging in recent months.
Consumer prices rose 0.8% in August from a year ago, in line with economists’ estimates in a Reuters poll, and accelerating from July’s 0.5% gain, the official release showed.
Core CPI, excluding volatile food and energy prices, climbed 1% in August, edging up from a 0.9% gain in July.
Dong Lijuan, chief statistician at NBS, attributed the rebound in inflation to volatile global commodity prices, seasonal food price gains, and rising demand in high-tech industries, according to a statement accompanying the release.
The factory-gate inflation was largely concentrated in energy-related sectors, while that for consumer goods continued to fall, in a sign of soft demand and persistent overcapacity across industries, said Nguyen Hoang Nam, an economist at Capital Economics.
Notably, electronics price inflation climbed to a fresh high last month on the back of global memory-chip shortages, Nam said.
Both consumer and producer price inflation are likely to ease should energy flows in the Gulf region normalize over the coming months, Nam noted. He expects producer prices to fall back into deflation next year.
Tianchen Xu, senior economist at the Economist Intelligence Unit, pointed to the muted performance in the services industry. “There wasn’t a seasonal uptick in service prices as in previous years,” he said, reflecting weaker-than-usual summer tourism.
Danske Bank earlier this week lowered its 2026 GDP growth forecast for China to 4.6% from 4.8% on the back of disappointing consumer data in recent months, while trimming its consumer-inflation forecast to 0.8% for this year from a previous 1%.
“China’s domestic economy remains stuck in a slump, with a negative feedback loop of falling home prices, high savings, weak employment, and slow consumer spending,” said Allan von Mehren, chief China economist at Danske Bank. “Until we see a moderate recovery in the housing market, we expect household confidence to remain low and private consumption growth weak.”
Growth in the world’s second-largest economy has lost momentum after a solid start to the year, with expansion in the second quarter at the slowest level in more than three years. Economic data for July showed retail sales and urban investment both weakened, adding to pressure on Beijing to step up support for the remainder of the year.
The youth unemployment rate in urban areas climbed to 17.9% in July, official data showed, the worst reading since August 2025.
