National Business Daily:

The PPI shifted from monthly decline to monthly increase in November, with the yearly decline narrowing. What were the factors behind this? And how do you predict the PPI will change in the future? Thank you.

Fu Linghui:

Thank you for your questions, which are also about prices. In November, as existing and incremental policies took effect, demand for industrial products improved. Certain industries optimized and adjusted production capacity, prompting increases in industrial producer prices.

In terms of monthly changes, PPI rose 0.1% in November after decreasing by 0.1% in the previous month. In particular, raw material related industries saw increased prices. Cement and glass manufacturing prices rose 6.2% and 1.8%, respectively, and prices of smelting and pressing of non-ferrous and ferrous metals rose 1.2% and 0.2%, respectively. In terms of yearly changes, the PPI declined 2.5% year on year in November, narrowing by 0.4 percentage point compared with the previous month. Prices of means of production decreased 2.9%, narrowing by 0.4 percentage point compared with the previous month. Among major industries, the price declines in petroleum and chemical, computers and communication equipment, and electrical and machinery industries all narrowed. Prices of smelting and pressing of non-ferrous metals further increased.

As prices improved, we should also note that decreasing international crude oil prices have impacted related industries at home. In November, the prices for petroleum extraction and organic chemical raw materials manufacturing both declined by 1.4% month on month. Meanwhile, technological advancements accelerated in certain domestic industries, leading to declining prices of related products. In November, prices of new energy vehicle manufacturing were down by 0.8% month on month.

Despite the impact of falling international commodity prices and falling prices in certain industries at home, the supply and demand for industrial products showed signs of improvement as macro policies took effect. In some sectors, prices ceased to decline and started to stabilize, helping improve enterprise operations. Looking ahead, we will continue to leverage various macro policies to expand domestic demand, promote innovation-driven development and capacity adjustment, improve the dynamic equilibrium between production and demand, and stabilize and improve prices. This will boost enterprise confidence in their operations and development, ensuring sustained healthy economic development. Thank you.