On 11 february, the national institute of statistics released data on the national consumer price index (cpi) and the industrial producer price index (ppi) for the 2025 base period, the first data release since the rotation of the base period. In response, the head of the urban division of the national statistical office received a special interview with the china news。
1. Why rotate the price index base period
Response: the rotation of the base period is an important foundation for the production of price indices, as well as international practice and common practice aimed at adapting to new changes in the structure of trade in goods and services in production, circulation and consumption. The base period refers to the base period for which the index is 100. Under the statistical system arrangement, our cpi and ppi now rotate every five years, and the price index for the 2025 base period has been prepared and published since 2026. The cpi base period rotation is detailed below。
The cpi is a relative sum of the changes in the price levels of goods and services consumed by the population over a period of time. Because of the thousands of categories and varieties of consumption among the population, and in order to observe their overall price changes, a representative set of goods and services that are frequently consumed by the population for a certain period of time and have a greater impact on the livelihood of the population is usually selected as a “fixed basket” to represent price changes for all goods and services in society. As a result of economic and social development, the consumption structure of the population is changing and the “fixed basket” of the cpi survey needs to be adjusted in a timely manner. For example, as our inhabitants increasingly purchase new energy cars, the use of electricity for transportation needs to be included in the cpi survey in a timely manner. Cpi base period rotation is the adjustment of the “fixed basket” and price comparison base periods to the latest changes in the consumption structure of the population, to further improve the representation of price indices and to reflect changes in consumer market prices more accurately。
2. What is the rotation of the base period? What have been the changes in the cpi survey for the base period of this round
Response: the elements of the rotational adjustment for the base period for price indices include, inter alia, a catalogue of survey classifications, survey sites (enterprises) and representative specifications, classification weights and price comparison base periods. The rotation of the cpi base period is specified below。
The rotation of the cpi base period begins with the revision of the survey classification catalogue. For the current period, the cpi classification has been adjusted to the actual situation, based on a thorough study of the consumer market and the input received from various sources, taking into account the united nations classification of individual consumption expenditures by purpose (coicop) 2018 and our own classification of consumer consumption expenditures 2013. After this adjustment, the number of major categories and basic classifications remains unchanged at 8 major categories and 268 basic classifications. The classification of goods and services reflecting the new content of consumption, such as housing security equipment, geriatrics, dishwashers, car electricity, photographic services, internet medical services, medical beauty services, etc., has been added on the basis of partial deductions, consolidation and fragmentation, further expanding coverage in new areas of the new economy. In addition, based on the actual coverage of the survey, the name of the category “food, tobacco and alcohol” was changed to “food, tobacco and catering” and the name of the category “tourism” was changed to “travel agencies and other tourism services”; in order to better reflect the overall changes in consumer prices of residents travelling, a new index was added to calculate the exit service price, which covers such categories as air tickets, train tickets, accommodation outside, rental of transport vehicles, travel agencies and other tourism services。
Following the completion of the revision of the inventory of surveys, sites of surveys and specific representative specifications were selected from each location on a case-by-case basis. The national cpi survey site totals about 120,000 sites during the current cycle, with approximately 620,000 survey specifications, which is a further expansion of survey coverage compared to the previous cycle. In order to fully reflect the new patterns of consumption of the population, not only new retail outlets such as member supermarkets, new instant retail platforms such as flash shopping, but also representative specifications such as smart drones have been added. The current base period has also further optimized the collection of cpi data, with an increase in the share of large data applications, such as network transaction prices, enterprise electronic data, and administrative records. In 2025, prices were collected throughout the year on the selected specifications for the new base period, providing a comparative basis for the calculation of the new base period index。
Validation is also an important part of the cpi base period rotation. Cpi weights are measured using internationally comparable methods, following the principles of objectivity, authenticity and scientific uniformity. Upon completion of the cpi weights, the 2025 index was recalculated at the price of the new specifications collected as the new comparative base period。
How can the cpi weights be determined? What are the main weights? How are the weights different from the base period of the previous round
Response: cpi weights refer to the proportion of expenditures for the purchase of goods or services in the “fixed basket” as a proportion of the expenditure required for the purchase of the basket as a whole at a comparative price. The source of weights is based on information on household consumption expenditure in household surveys of income and expenditure and living conditions, and some subcategories and basic classifications are supplemented by specific surveys of weights, which are refined in conjunction with other macro-data and industry statistics to ensure that the weights objectively and honestly reflect the population's consumption structure. Specifically, the eight main categories of food, alcohol and tobacco, and external catering, clothing, housing, household goods and services, transport and communications, educational and cultural recreation, health care, other goods and services were the basis options for 2025 of 29. 5 per cent, 5. 4 per cent, 22. 1 per cent, 5. 5 per cent, 14. 3 per cent, 11. 4 per cent, 8. 9 per cent and 2. 9 per cent respectively。
Compared to the base period 2020, the overall changes in cpi weights for the current base period are small. In terms of structure, there has been an increase in the number of service weights in the cpi and a decrease in the number of consumer weights, which is consistent with the economic and social development pattern and the actual situation in the country. In terms of classification, there has been an increase in the five main categories of food, tobacco and alcohol, and external catering, transport and communications, educational and cultural entertainment, health care, other supplies and services. In the general category of food, alcohol and tobacco and outside catering, the weight of food has decreased and the weight of meals outside has risen. There has been a decline in the three main categories of clothing, housing, household goods and services。
What needs to be noted when using cpi weights
Response: when using the cpi weights, care needs to be taken to distinguish the period of comparison of the weights. The cpi weights are divided into base, ring and homogenous weights, corresponding to the base index, the ring index and the homogeneity index, respectively, according to different comparison periods, such as the base year, the previous month and the same month of the preceding year. Specifically, for the base index, the comparison period is fixed as the base year, with weights representing the share of expenditure for the purchase of goods or services in the “fixed basket” basket at annual prices. During the base period, the annual price of the base period remained constant, so that the weights of the base index were fixed and the anchors, commonly known as the base, were fixed. Because of the period in which they were compared to the previous month and the same month in the previous year, the price of goods or services will increase or fall as the period changes, the amount of expenditure on the same quantity of goods or services will change and their share of total expenditure will change, resulting in an automatic adjustment of the weights of the monthly ring and the same index established。
The ring comparison and the same weight may be calculated on the basis of the base weights, taking into account monthly price movements in the category. The 13 categories of weights published this time are base-period weights, which correspond to the base index, and on which the monthly ring and the same weights automatically change with price. Users can use as needed, e. G. To measure the impact of changes in the price of the pork ring on the cpi ring index, the ring weight of the pork should be used, and the results should be biased if the base weight is simply used。
Does the rotation of the base period have an impact on the cpi and ppi data
Response: after the rotation of the base period, changes in the survey catalogue of classifications, survey points and representative specifications, weights, etc. Will have some impact on the price index, but these factors vary in direction and magnitude, and the combined effect on the overall index. The impact of rotation for the current base period on the cpi and ppi year-to-month homogeneity indices has been measured at an average of 0. 06 and 0. 08 percentage points, which is small overall。
