Einar H. Dyvik
Research expert covering Nordics and global data for society, economy, and politics
Consumer Price Index and inflation rate in China - statistics & facts
Inflation denotes the increase of price levels over a certain period of time. The level of inflation is expressed in the inflation rate, which is an important indicator of economic development and is hence closely scrutinized by decision makers in public and private entities. Inflation rates may refer to any kind of prices, but most commonly used are inflation rates related to prices for consumer goods and services, as these prices reflect the cost of living for the average population.
Over the last two decades, the inflation rate in China ranged at a low and stable level, averaging 2.3 percent annually. This was the lowest level of inflation of all BRIC countries and significantly lower than the inflation rates of developed countries in recent years. However, since accounting methods vary, the low Chinese inflation figures may not adequately display the rise in cost of living felt by many people living in China’s fast-growing cities and urban areas.
The consumer price index in China
National inflation rates are commonly based on the Consumer Price Index (CPI) of the respective country. The CPI is an economic indicator that measures changes over time in the price level of a representative basket of consumer goods and services for a defined population and geographic region. The Chinese Consumer Price Index is calculated by the National Bureau of Statistics of China on a monthly and annual basis. It covers the prices of goods and services of 268 basic divisions grouped into eight categories, which represent the living consumption of urban and rural residents.Over the last two decades, the inflation rate in China ranged at a low and stable level, averaging 2.3 percent annually. This was the lowest level of inflation of all BRIC countries and significantly lower than the inflation rates of developed countries in recent years. However, since accounting methods vary, the low Chinese inflation figures may not adequately display the rise in cost of living felt by many people living in China’s fast-growing cities and urban areas.
Recent development of consumer prices
In recent years, inflation rates in China were considerably lower than in other major economies. Consumer price inflation in China had picked up during COVID-19 and peaked at 2.8 percent in September 2022. Same as with global inflation, price increases were mainly driven by rising costs for fuels and raw materials, with inflation spreading to food prices during 2022. However, as economic recovery after COVID-19 was sluggish in China, consumer prices dropped soon and even developed deflationary tendencies during 2023 and 2024. Inflation is expected to pick up in 2025, but will most probably still remain at a low level due to the difficult economic situation in the country.
