A pedestrian passes in front of the Apple Store at the Taikoli Sanlitun shopping complex in Beijing, China, on August 22, 2026.
Chen Xin | Getty Images
China’s consumer and wholesale inflation rebounded in August as rising global commodity prices and a surge in high-tech demand cushioned persistent weakness in domestic consumption.
Data released by the Office for National Statistics on Wednesday showed the producer price index rose 3.8%, beating economists’ expectations for a 3.6% rise and above the three-month low of 3.5% in July.
Economists said much of the upturn reflected favorable underlying comparisons and higher commodity costs rather than a true strengthening of household demand as the effects of the Chinese government’s trade-in subsidies and other consumption-stimulating measures faded. Oil prices have skyrocketed in recent months due to the Iran war.
Consumer prices rose 0.8% in August from a year earlier, according to official data, in line with economists’ forecasts in a Reuters poll and accelerating from a 0.5% rise in July.
Core CPI, which excludes volatile food and energy prices, rose 1% in August, up slightly from July’s 0.9% rise.
In a statement accompanying the release, NBS chief statistician Don Lijuan said the rebound in inflation was due to volatile global commodity prices, seasonal food price increases and rising demand from high-tech industries.
Nguyen Hoang Nam, an economist at Capital Economics, said factory-gate inflation was mainly concentrated in energy-related sectors, but consumer goods inflation continued to fall, indicating weak demand and persistent overcapacity across industries.
In particular, price inflation for electronics products rose to a new high last month, against the backdrop of a global memory chip shortage, Nam said.
As energy flows normalize in the Gulf region in the coming months, both consumer and producer price inflation is likely to ease, Nam said. He expects producer prices to return to deflation next year.
Tiancheng Xu, senior economist at the Economist Intelligence Unit, said the service industry’s performance has been weak. “There was no seasonal increase in service prices compared to previous years,” he said, reflecting lower-than-usual summer tourist numbers.
Earlier this week, Danske Bank lowered its forecast for China’s 2026 GDP growth to 4.6% from 4.8%, citing disappointing consumer data in recent months, and lowered its consumer inflation forecast for this year to 0.8% from 1%.
“China’s domestic economy remains depressed due to a negative feedback loop of falling house prices, high savings, weak employment and weak consumer spending,” said Alan von Mehren, chief China economist at Danske Bank. “Until we see a gradual recovery in the housing market, we expect household confidence to remain low and consumer spending growth to be weak.”
Growth in the world’s second-largest economy lost momentum after a strong start to the year, with second-quarter expansion at its weakest level in more than three years. Economic data for July showed both retail sales and urban investment sagging, increasing pressure on the Chinese government to step up aid this year.
The urban youth unemployment rate rose to 17.9% in July, the worst figure since August 2025, according to official data.
