The Consumer Price Index (IPC), China’s primary indicator of inflation, rose 1.2% in April compared to the same period last year—an increase of 0.2 percentage points over March, it was announced today.
The data released by the National Bureau of Statistics (NBS) defies analyst expectations, which had predicted a drop from the 1% recorded in March down to 0.8%.
The institution attributed the trend primarily to the impact of international crude oil prices and increased demand due to holiday travel. April included a three-day long holiday for the Chinese Tomb-Sweeping Day and the lead-up to the five-day Labor Day holiday starting May 1st.
NBS specialist Dong Lijuan noted that energy prices rose 5.7% from the previous month, with a notable 12.6% increase in gasoline. This surge comes amid rising fuel costs driven by the war in Iran and the blockade of the Strait of Hormuz, through which approximately 45% of China’s oil and gas imports pass.
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Furthermore, holiday demand boosted costs in the following sectors:
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Airfare: +29.2%
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Car rentals: +8.6%
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Hotel accommodation: +3.9%
In contrast to rising costs elsewhere, food prices fell 1.6% compared to the previous year. Notable reductions included pork (-15.2%), fresh vegetables (-0.5%), and fruit (-1%), the latter benefiting from rising temperatures and increased supply.
Meanwhile, the price of gold jewelry surged 46.9% year-on-year, though the pace of the increase slowed compared to the previous month.
Core inflation, which excludes volatile food and energy prices, stood at 1.2% compared to the previous year.
The NBS also released the Producer Price Index (IPP), which measures industrial prices. It showed a 2.8% increase in April on an annual basis, the highest value since July 2022.
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On a monthly basis, the IPP shifted from a 0.7% drop in March to a 0.3% increase in April, driven by “international factors” in the raw materials markets. The most affected sectors were:
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Oil and natural gas extraction: +18.5% (monthly)
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Fuel processing: +16.4%
Dong also highlighted price increases in sectors linked to computing and electrification. Fiber optic manufacturing rose 22.5% due to the rapid growth in demand for computing power driven by the rise of Artificial Intelligence (AI).
Finally, the NBS indicated that measures to optimize market order and combat “irrational competition” led to positive changes in the manufacturing of lithium-ion batteries (+1.6% monthly), while the price decline in electric vehicles and renewable energy slowed to 0.1%.
