China's Inflation Reports Highlight Ongoing Demand Slowdown

Li Chen
10 Dec, 2025
Hong Kong

Stocks in China and Hong Kong turned lower, and investors held back from adding new positions ahead of the release of China's 2026 policy priorities. 

The Hang Seng Index decreased 0.4%, and the mainland-focused CSI 300 index fell 0.4% as international investors awaited the release of the U.S. Federal Reserve's rate decisions. 

Traders in Asia and China are factoring in a 25-basis-point rate cut, but the Fed's pace and number of rate cuts are likely to impact trading sentiment. 

Policymakers are struggling to contain inflationary forces while keeping the labor market from weakening further. For now, investors are hoping that policymakers will deliver a third consecutive rate cut and signal readiness to cut more in 2026. 

Closer to home, investors reviewed the latest inflation updates released by the National Bureau of Statistics. 

Consumer price inflation accelerated in November to 0.7% from 0.2% in the previous month and rose for the second consecutive month.  

The headline inflation advanced following a 0.2% increase in food prices, after declining 2.9% in October. 

China's producer price index decreased 2.2% in November; the measure of wholesale prices fell for the 38th consecutive month, said the statistical bureau in a separate report. 

Despite the government's efforts to stem intense competition, prices continue to fall in several industries as businesses battle weak demand. 

On a monthly basis, producer prices rose by 0.1%, matching the rate in October. 

   

China Indexes and Stocks 

The Hang Seng Index decreased 0.4% to 25,324.75, and the mainland-focused CSI 300 index dropped 0.4% to 4,559.85. 

Technology stocks remained under pressure amid a lack of interest and worries about an AI bubble. 

Alibaba Group Holding added 0.3% to HK $151.30, Tencent Holdings dropped 1.8% to HK $596.0, and Baidu Inc. advanced 0.9% to HK $122.50.