Story · China · 10 Aug 2026
China producer prices were 3.5% higher year-on-year in July
China's industrial producer prices changed 3.5% year on year in July 2026, while prices changed -0.7% from the previous month.
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3.5%
Annual producer-price inflation
-0.7%
Monthly producer-price change
1.8%
Year-to-date producer-price inflation
Exam link: Inflation → real incomes and purchasing power → consumption; policy response depends on the cause
Understand the storyExpand Close
China's National Bureau of Statistics reported industrial producer prices of 3.5% year on year in July 2026. Producer prices changed -0.7% month on month, while the January-to-July average was 1.8% year on year.
What happened
The headline producer-price index changed -0.7% over the month and 3.5% compared with a year earlier. Across the year to date, producer prices changed 1.8% from the same period a year earlier.
Why it matters
Producer prices measure cost pressures earlier in the supply chain. Rising factory-gate prices can contribute to cost-push inflation if firms pass higher costs on to consumers, although pass-through depends on demand conditions and profit margins.
Economic context
For A-Level Economics, this is current evidence for cost-push inflation and short-run aggregate supply. Compare producer-price movements with CPI to evaluate whether upstream cost pressures are feeding through to households.
All key dataExpand Close
- Monthly producer-price change
- -0.7%
- Annual producer-price inflation
- 3.5%
- Year-to-date producer-price inflation
- 1.8%
Terms explainedExpand Close
Month-on-month
A comparison with the immediately previous month, rather than with the same month a year earlier.
Year-on-year
A comparison with the same period one year earlier, which helps separate annual change from short-run monthly movements.
Use it in an examExpand Close
Evidence
China's industrial producer prices changed 3.5% year on year in July 2026, while prices changed -0.7% from the previous month.
Explain
Producer prices measure cost pressures earlier in the supply chain. Rising factory-gate prices can contribute to cost-push inflation if firms pass higher costs on to consumers, although pass-through depends on demand conditions and profit margins.
Evaluate
For A-Level Economics, this is current evidence for cost-push inflation and short-run aggregate supply. Compare producer-price movements with CPI to evaluate whether upstream cost pressures are feeding through to households.
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