China’s March CPI drops 0.1%, with core price index rebounding: NBS

China's consumer price index (CPI), a key measure of inflation, dropped by 0.1 percent year-on-year in March, according to data released by the National Bureau of Statistics (NBS) on Thursday.

NBS statistician Dong Lijuan noted that core CPI, which excludes food and energy prices, rose by 0.5 percent year-on-year in March, rebounding from a 0.1-percent drop in February. She attributed the rebound to improving supply-demand dynamics and the ongoing effects of pro-growth policies aimed at stimulating domestic consumption.

Prices declined by 0.1 percent in urban areas, and 0.3 percent in rural areas compared to a year earlier, according to the NBS.

Month-on-month, the CPI dropped 0.4 percent in March. The decline was mainly due to seasonal including greater availability of fresh food, reduced travel demand, and lower oil prices.

Food prices fell 1.4 percent year-on-year. Prices for vegetables, pork, eggs, and fruit all declined. Meanwhile, non-food prices recorded a modest increase. Industrial consumer goods excluding energy saw steady growth, with notable gains in home appliances and clothing.

Service prices rose 0.3 percent year-on-year, driven by a recovery in sectors such as housekeeping, elderly care, and cultural services.

The producer price index (PPI), which tracks prices for goods at the factory gate, dropped 2.5 percent year-on-year in March. 

The decline was mainly driven by lower global oil prices, weaker coal demand after the winter heating season, and falling prices in raw materials such as steel and cement, the data showed.

Despite the overall decline in factory prices, structural improvements continued in high-tech and equipment manufacturing, the bureau said.

Broader application of artificial intelligence and new technologies helped stabilize prices in smart devices, electronics, and automation equipment. Demand for aircraft, ships, and recreational goods also supported modest price gains, according to the NBS.

Additionally, spring farming activities led to seasonal price increases in agricultural materials including fertilizers and seeding equipment, the bureau said.