Where to begin

Driven by global factors, China's Consumer Price Index (CPI) saw a monthly decline and a slower annual increase in July. Meanwhile, the Producer Price Index (PPI) also recorded a monthly drop and a moderated annual gain, influenced by both seasonal effects and international inputs, despite rising demand in certain domestic sectors.

Why the outlook remains steady

National Bureau of Statistics spokesperson Wang Guanhua stated that while international commodity price fluctuations may create some disturbances for domestic prices in the second half of the year, China's resilient economy, ample supply of daily necessities, and effective policy framework for stabilizing prices are key strengths. As consumer stimulus policies continue to take effect, demand for services, premium goods, and new types of consumption is expected to be released steadily, keeping consumer price inflation on a moderate upward trajectory.

Wang Guanhua added that the PPI has sound support for stable performance going forward. The integration of artificial intelligence across various sectors is fueling a surge in computing power demand, and with a gradually improving market competition environment, this could drive prices higher in related industries. Although external uncertainties are numerous and the direction of international commodity prices remains unpredictable, China's diversified industrial base, strong production capacity, multiple energy import channels, ample reserves, and increasingly resilient industrial and supply chains equip it to withstand external risks and manage complex situations, making the impact of external price contagion largely controllable.