In October 2025, China's Industrial Producer Price Index (PPI) declined by 2.1% year-on-year but rose 0.1% month-on-month, continuing the recent trend of stabilization and recovery. The year-on-year decline narrowed by 0.2 percentage points compared to the previous month, indicating a gradual easing of downward pressure on industrial product prices. Over the past six months, the year-on-year PPI drop has steadily narrowed—from -3.3% in May to -2.1% in October—reflecting marginal improvement in industrial demand and stabilizing market expectations. By category, producer goods prices fell 2.4% year-on-year but were flat month-on-month, suggesting raw material and intermediate product prices remain low but with reduced volatility. Consumer goods prices dropped 1.4% year-on-year, with a nearly unchanged month-on-month reading, indicating stable consumer price levels without clear signs of inflation or deflation. Overall, the dual stabilization of producer and consumer goods prices suggests improving price transmission mechanisms across the industrial supply chain and easing cost pressures for manufacturing. Analysts attribute the current price trends to multiple factors: global commodity price fluctuations have slowed, domestic inventory adjustments in key industrial sectors are largely complete, and supply-side rebalancing is taking shape. Meanwhile, domestic demand is recovering faster, with renewed momentum in infrastructure and manufacturing investment supporting industrial demand. Although short-term downward pressure remains, the consistently narrowing decline points to an improving economic fundamentals.