Headline: Nomura: China’s Anti‑Involution Push Won’t Revive Growth as Inflation Lift Remains Modest
China’s latest inflation figures offered only a faint improvement, reinforcing the view that the recovery is still fragile. Nomura said October’s data signal a mixed backdrop for prices and production, with pockets of strength overshadowed by persistent weakness in durable goods and domestic demand.
Consumer inflation edged up 0.2% year-on-year in October, reversing September’s 0.3% decline and slightly topping expectations. The move was driven by higher food prices and a firmer core basket, with surging gold prices providing an unusual lift. On the supply side, producer price deflation narrowed to -2.1% from -2.3%, helped by stronger non-ferrous metals. Even so, prices for durable goods stayed soft, underlining ongoing industrial and investment sluggishness.
Nomura kept its 2025 outlook unchanged, projecting average CPI around 0% and PPI down 2.5%. The bank cautioned that Beijing’s “anti-involution” campaign—efforts to counter neijuan, or excessive internal competition, by promoting productivity, creativity, and better work-life balance—is unlikely to spark a sustained upswing on its own. While initiatives targeting quality-driven growth, youth employment, and healthier corporate practices are constructive, economists argue that stronger demand-side support will be needed to meaningfully boost consumption, rebuild confidence, and restore momentum.
Key Points – October CPI rose 0.2% year-on-year, reversing September’s 0.3% decline. – PPI deflation narrowed to -2.1% from -2.3%, aided by non-ferrous metals. – Inflation gains were led by food and a firmer core; gold prices were a notable contributor. – Durable goods prices remained weak, signaling continued industrial softness. – Nomura’s 2025 forecasts: CPI around 0% and PPI at -2.5%. – Anti-involution reforms may improve productivity, but stronger demand-side stimulus is still needed to lift growth.
