Beijing News:

We have noted that China's CPI rose modestly in April, with the month-on-month increase exceeding seasonal norms. What were the main reasons for this? Meanwhile, international oil prices experienced considerable volatility in April. What impact has this had on China's CPI? What is your outlook for the months ahead? Thank you.

Fu Linghui:

I would like to invite Ms. Wang to answer your questions.

Wang Guanhua:

Thank you for your questions. Your questions focused mainly on consumer price trends and the impact of global oil prices on the domestic market.

As the data released earlier shows, consumer prices have continued to recover moderately. In the first four months of the year, the CPI rose 0.9% year on year. In April, the year-on-year increase in the CPI widened, while on a month-on-month basis, the CPI rebounded from a decline in the previous month, driven by factors including fluctuations in global crude oil prices and stronger holiday travel demand.

On a month-on-month basis, the CPI rose 0.3% in April after falling 0.7% in the previous month, mainly due to higher energy and travel service prices. Affected by rising global crude oil prices, domestic energy prices rose 5.7% from the previous month, 0.9 percentage point higher than in March. To cushion the impact of international crude oil price volatility, China continued to implement temporary adjustment measures for refined oil prices. As a result, domestic gasoline prices rose less sharply than international oil prices. In addition, many regions introduced spring breaks for primary and middle school students. Together with the Qingming Festival and May Day holidays, this boosted demand for family-oriented travel and tourism services. Prices for air tickets, vehicle rentals, travel agency services and hotel accommodation all rose from the previous month. Together, these four categories contributed about 0.17 percentage point to the monthly CPI increase.

On a year-on-year basis, the CPI rose 1.2% in April, up 0.2 percentage point from March, remaining above 1% for three consecutive months. Core CPI, which excludes food and energy prices, also rose 1.2%, edging up 0.1 percentage point from the previous month. Both the CPI and core CPI showed a moderate pickup. By category, food prices declined while prices for industrial consumer goods and services continued to recover. First, food prices turned negative after rising in the previous month. Food prices fell 1.6% year on year in April, compared with a 0.3% increase in March. Prices of fresh vegetables, fresh fruit and pork declined, while mutton, beef, aquatic products and eggs increased from a year earlier. Second, prices of industrial consumer goods rose at a faster pace. Prices of industrial consumer goods rose 3.5% year on year in April, up 1.3 percentage points from the previous month. Among these, prices of gold jewelry, household appliances and clothing increased 46.9%, 2.6% and 1.6%, respectively, while gasoline prices rose 19.3%. Third, service prices continued to pick up. Travel-related services remained robust in April, pushing up transportation and tourism service prices, which rose 3.7% year on year. In addition to travel services, prices of labor-intensive services, including pet care, dining out, housekeeping, vehicle repair and maintenance, also posted modest increases. Supported by these factors, service prices rose 0.9% year on year in April, up 0.1 percentage point from the previous month.

Overall, China's consumer prices continued to rise moderately in April. Fluctuations in international crude oil prices had a limited and manageable impact on domestic consumer prices, with the effects showing clear structural characteristics. Looking ahead, volatility in global energy prices will inevitably have some impact on domestic prices. However, the fundamentals supporting overall price stability remain intact. China has an ample supply of goods and services, solid energy security, and stable and reliable industrial and supply chains. Circulation networks are running smoothly, with ongoing measures in place to secure supply and stabilize prices of essential goods and energy resources. Thank you.