For Part 2 of this report click here.

Key Revisions to CPI Methodology (2020–2025)

  1. Modernized Basket:

    • 2023 Weighting Adjustments: Reduced food (32% → 25%), increased housing (17% → 23%), added tech services (5%).

    • New Categories: Ride-hailing (3%), streaming subscriptions (2%), private healthcare (4%).

  2. Regional Differentiation:

    • Tier 1 cities (Beijing/Shanghai/Shenzhen) now use a separate basket with higher housing/education weights.

  3. Data Transparency:

    • Partial disclosure of basket components since 2022, though 30% remains classified (e.g., military-related adjustments).

Persistent Issues with CPI Accuracy

Why CPI Still Matters in 2025

  1. Policy Benchmark: PBOC uses core CPI (ex-food/energy) for interest rate decisions.

  2. Regional Planning: Identifies poverty-alleviation targets (e.g., Western China CPI = 1.5% vs. real ~2.4%).

  3. Wage Adjustments: Minimum wage hikes tied to CPI in 18 provinces.

Vizualizing the Data

1 Regional Inflation Disparities (2025)

Key Insight: Tier 1 cities show 3–5% underestimation.

2 CPI Basket Weighting Changes (2000 vs. 2025)

Key Insight: Housing/Healthcare doubled, food halved.

3 Monthly CPI Trends (2020–2025)

Key Insight: Tier 1 cities consistently 3–4% above official CPI.

For Part 2 of this report click here.