by XIN Yuan
China's factory-gate prices fell at a slower pace in December and rose for a third straight month on a sequential basis, official data showed on Friday, offering some relief after a prolonged period of industrial deflation.
The producer price index (PPI) declined 1.9% year on year in December 2025, narrowing by 0.3 percentage point from November, according to the National Bureau of Statistics. On a month-on-month basis, PPI rose 0.2%, extending gains that began in October.
DONG Lijuan, chief statistician at the NBS's urban department, said in a statement that recent policy measures have started to support price momentum in parts of the industrial sector.
The statistics bureau said price declines eased in upstream industries such as coal mining, lithium-ion batteries and photovoltaic equipment, as market competition became more orderly. Prices also rose in some higher-end manufacturing and technology-related industries.
Improving consumer demand lifted prices in selected downstream segments, with sharp gains in arts and crafts products and more modest increases in sports goods, musical instruments and nutritional foods.
Economists cautioned that the improvement remains limited and uneven. WANG Qing, chief macro analyst at Golden Credit Rating, told Jiemian News that policy measures since mid-year helped stabilize month-on-month PPI readings, while base effects narrowed the year-on-year decline to around -2% in the second half of 2025. He said weak demand led by the property downturn will keep pressure on industrial prices and expects full-year 2026 PPI to average around -1.6%.
Other economists see scope for further improvement in 2026. WU Chaoming, chief economist at Hunan Chasing Financial Holdings, said PPI could average around -0.3% next year and turn positive around mid-year if demand improves and commodity prices stay firm.
XIONG Yuan, chief economist at Guosheng Securities, said supply-side adjustments and stronger demand for industrial metals could further narrow price declines, with PPI potentially turning positive in the second or third quarter.