In October 2025, China’s economy showed signs of recovery. After several months of deflation, which means prices were falling, the consumer price index (CPI) finally bounced back to positive growth. It rose by 0.2% year-on-year, marking the first increase since June. This change is a notable moment for China’s market and reflects efforts to boost consumer spending, particularly during the holiday season.
Food prices had a complicated month. They were down by 2.9% compared to last year, but they did see a slight rise of 0.2% from the previous month. On the wholesale side, factory prices fell by 2.1% year-on-year but increased by 0.1% month-on-month. This shift suggests a modest easing of deflationary pressure, which is a positive sign for manufacturers.
Dong Lijuan, a chief statistician with China’s National Bureau of Statistics, pointed out that recent policies aimed at increasing domestic consumption are starting to take effect. This follows a significant increase in industrial profits, which rose over 21% in September.
However, while these developments are encouraging, challenges remain. China’s manufacturing sector continued to struggle, with activity slowing significantly in October. A recent official survey indicated that production, new orders, and employment all contracted, signaling weaker demand. This slowdown comes amid ongoing trade tensions with the U.S. and a struggling housing market.
In another concerning trend, China’s exports faced a steep decline. Shipments to the U.S. dropped 25%, marking the seventh consecutive month of double-digit declines. However, there is some hope for improvement. In late October 2025, a meeting between U.S. President Donald Trump and Chinese President Xi Jinping hinted at a possible trade truce. This development might ease some trade pressures and encourage export growth in the future.
Looking ahead, Chinese leaders have emphasized the importance of strengthening domestic consumption as part of their five-year economic roadmap. They are focusing on balancing consumer spending with effective investments, revealing a commitment to economic stability.
Overall, while challenges remain, these positive signs indicate a potential shift in China’s economic landscape. For more detailed insights on China’s economic strategies, the National Bureau of Statistics provides updates and reports here.
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