National Bureau of Statistics data shows that in August, the Producer Price Index (PPI) fell 2.9% year-over-year, with the decline narrowing by 0.7 percentage points from the previous month. Month-over-month, PPI remained flat, compared to a 0.2% decline in the previous month.

At a State Council Information Office press conference on September 15, Fu Linghui, spokesperson for the National Bureau of Statistics, Chief Economist, and Director of the Department of Comprehensive Statistics of National Economy, stated that August's PPI shift from decline to flat month-over-month, with narrowing year-over-year declines, was primarily driven by effective macroeconomic policies, deepening construction of a unified national market, gradually optimizing corporate competition order, and rapid growth of new growth drivers.

The significant narrowing of August PPI's year-over-year decline can be attributed to three main factors:

First, market competition order has been optimized. Recent efforts by relevant departments to actively promote industry self-discipline, advocate against disorderly corporate competition, and advance capacity management in key industries have gradually shown results. In August, ex-factory prices for coal processing, ferrous metal smelting and rolling processing, and coal mining and washing narrowed their declines by 3.2-10.3 percentage points compared to the previous month. Price declines for photovoltaic equipment and components manufacturing, and new energy vehicle manufacturing narrowed by 2.8 and 0.6 percentage points respectively year-over-year. These five industries reduced their drag on PPI year-over-year growth by approximately 0.5 percentage points compared to the previous month.

Second, demand from emerging industries has strengthened. As China's economic structural adjustment steadily advances, with industrial development moving toward high-end and intelligent transformation, market demand has steadily expanded, driving price increases in related industries. In August, integrated circuit packaging and testing manufacturing prices rose 1.1% year-over-year, while ship and related equipment manufacturing prices increased 0.9%. The rapid development of artificial intelligence applications and market acceptance of intelligent products have strengthened their price-supporting effect. Wearable smart device manufacturing prices rose 1.6% year-over-year in August.

Third, consumer stimulus policies have shown tangible effects. Since the beginning of this year, specialized consumer promotion campaigns have been implemented in depth, with trade-in programs for consumer goods expanding in scope and scale, releasing consumption potential and driving demand for upgraded products, leading to year-over-year price increases in some industries. In August, arts and crafts and ceremonial goods manufacturing prices rose 13% year-over-year, sports ball manufacturing prices increased 4.7%, specialized sports equipment and accessories manufacturing prices rose 0.4%, while nutritional food manufacturing and health food manufacturing prices increased 0.9% and 0.3% respectively.

Fu Linghui also noted that PPI remains in negative territory, which is unfavorable for improving industrial enterprise operations. Going forward, efforts should focus on further expanding domestic demand, deepening the construction of a unified national market, standardizing corporate competition order, and promoting reasonable recovery in industrial goods prices.