China’s producer price index rose 3.5% year over year in July, according to the National Bureau of Statistics. The figure marks another month of factory-gate price increases in the world’s second-largest economy.
The reading follows June’s 4.1% year-over-year PPI increase, which was the steepest since July 2022. That June number itself topped May’s 3.9% gain, meaning July’s 3.5% represents a slight deceleration.
From deflation to acceleration
China’s factory-gate prices spent 41 consecutive months in decline before turning positive in March 2026 with a modest 0.5% year-over-year increase. From 0.5% in March to 3.9% in May and 4.1% in June, the trajectory suggested an industrial sector feeling genuine cost pressure for the first time in years.
The primary drivers behind the broader PPI acceleration have been production material costs. Coal mining, electrical machinery, electronics manufacturing, and ferrous metals processing all contributed meaningfully to June’s headline number. In that same month, purchasing prices for industrial producers surged 6.4% year over year.
