I noticed people have given up trying to pretend China’s not shin-deep in a disinflationary bog.

The limited color on offer Wednesday, when Beijing released CPI and PPI figures for November, felt morose despite an uptick in headline price growth.

This is important, by the way. When the world’s second-largest economy’s teetering precariously on the brink of deflation, it’s incumbent upon would-be macro mavens to keep apprised of the data, mundane a mandate as that surely is.

At 0.7%, headline inflation in China was the briskest since February of 2024 last month. That’d be good news if it weren’t a false optic.

Recall that CPI registered a 0.2% increase the prior month, which analysts generally wrote off to holiday demand around Golden Week and also to gold itself. Seemingly, the upsurge in the pace of price growth for November was likewise driven in no small part by gold, given a record 14% YoY leap in a category which includes jewelry.

The figure above gives you some context. For reference, gold accounted indirectly for at least half of the October core CPI gain in China.

The PBoC’s on a gold-buying spree which extended into a 13th month in November. Maybe the Party’s plan to extricate itself from deflation involves driving up gold prices so as to turbocharge the “miscellaneous goods and services” CPI category. (I’m kidding.)

Food prices, meanwhile, rose 0.3% last month, snapping a four-month run of deflation. Vegetable prices jumped 15%.

As the figure shows (orange annotation), PPI deflation actually worsened in November. Wholesale deflation set in during September of 2022 and hasn’t meaningfully abated since.

The simple takeaway: China’s still struggling mightily to escape the deflationary blackhole. You can’t rely on soaring bullion prices to drive healthy core inflation, and there’s exactly no evidence to suggest the Party’s made any progress reviving consumer sentiment.

If you doubt that latter assessment, just ask the Politburo, which this week pledged to redouble efforts in 2026 to ensure domestic demand’s “the main driver” of growth. China, the Party insisted, “must build a strong domestic market.”