China's Producer Inflation Reached 5.7% – Highest Since 2022

Producer inflation in China accelerated to 5.7% in October 2026 compared to the same month last year. This is the highest growth rate of the Producer Price Index (PPI) since June 2022. The figure exceeded economists' forecast of 5.3%, according to data from China's National Bureau of Statistics released on November 9.

In September, the annual PPI growth was 5.0%. Meanwhile, on a monthly basis, the October figure increased by 0.7% after a 1.2% rise in September. Thus, annual producer inflation accelerated, although the monthly rate of price increase slowed down.

The rise in producer prices is linked to the increase in raw material costs

The largest price increase was observed in the mining industries, where the figure rose by 27.9% year-on-year. In the production of raw materials, the growth was 11.6%, while in the manufacturing industry it was 3.5%.

The energy sector was particularly affected by the price increase. Prices in the oil and gas extraction industry increased by 35%, and in coal mining by 36.6%. The cost of chemical industry products rose by 16.4%.

The purchasing prices of industrial enterprises also continued to rise, increasing by 7.9% year-on-year. This indicates an increase in companies' costs for raw materials, fuel, and other production resources.

Meanwhile, prices for consumer goods within the PPI decreased by 0.1%. The difference between the dynamics of raw material sectors and finished products may indicate that producers are currently able to pass on only part of the additional costs to consumers.

Consumer inflation in China slowed to 0.7%

Despite the rise in production costs, China's Consumer Price Index (CPI) in October increased by only 0.7% year-on-year compared to 0.9% in September. Compared to the previous month, consumer prices remained unchanged.

One of the factors for the slowdown was a 2.9% year-on-year decrease in food prices. Meanwhile, non-food goods and services rose by 1.5%, and transportation and communication services by 5.5%.

Core consumer inflation, excluding food and energy, was 0.8% compared to 1.0% in September.

This dynamic reflects uneven distribution of price pressure. The rise in energy resources and raw materials increases business costs but is not yet accompanied by a comparable acceleration in overall consumer inflation.

How inflation in China might affect global markets

The rise in producer prices in China is significant for international trade, as the country remains one of the world's largest suppliers of industrial products.

If Chinese producers begin to more actively pass on additional costs to export prices, this could affect the cost of imported goods in other countries. However, the scale of such an effect will depend on consumer demand, competition, and the further dynamics of energy prices.

Investors are currently paying special attention to the US, where the October Consumer Price Index will be released on November 10.

According to Bloomberg's consensus forecast, the monthly growth of the US CPI may be 0.3%, and the core indicator excluding food and energy may be 0.2%.

At the meeting on October 28, the Federal Reserve maintained the interest rate in the range of 3.75–4.00%. New inflation data may change investors' expectations regarding the next decision of the regulator, scheduled for December.

Acceleration of consumer inflation in the US could increase expectations of further tightening of monetary policy. Weaker figures, on the contrary, may reduce the likelihood of a rate hike.

At the same time, the rise in China's PPI does not automatically mean an acceleration of inflation in the US. In the coming months, the key factor will be how much the increase in global prices for raw materials and energy affects the cost of final products and consumer demand.