Average inflation in China

Measures the change in prices of the basket of goods and services bought by Chinese households. Published by the National Bureau of Statistics (NBS), it is the country's main inflation gauge; it excludes investment, own-consumption, imputed rent and subsidised consumption.

Compiled from a regular price survey across a broad sample of outlets and regions. Those prices, weighted by each item's share of the representative basket, form a base-year index that is periodically updated to reflect consumption habits; the year-on-year and month-on-month changes are published.

Price developments affect consumption, saving and purchasing power, and are a central reference for the People's Bank of China. In China inflation has been low or even negative, so a weak reading fuels the debate over deflation and further stimulus.

It only measures a fixed basket, so it does not capture every good and service in the economy. It is heavily influenced by the weight of food, especially pork prices; for the underlying trend the core CPI, which strips out energy and fresh food, is watched.