China's producer price index rose 3.8% year-on-year in August 2026, accelerating from 3.5% in July and exceeding the 3.6% Reuters poll forecast as higher crude oil and non-ferrous metal prices lifted industrial costs. Consumer prices increased 0.8% from a year earlier, up from 0.5% in July, while core inflation rose to 1%. The consumer price index gained 0.4% from July, reversing a 0.1% decline and exceeding expectations for a 0.3% increase. Higher energy costs, including a 9.3% annual rise in gasoline prices, and demand linked to artificial intelligence and computing power supported the inflation pickup, though economists said the data did not demonstrate a broad recovery in household demand. Beijing has expanded loan-interest subsidies for consumers and small private firms, curbed housing presales and extended maximum personal mortgage terms to 40 years from 30. The offshore yuan traded around 6.70 per dollar, its strongest level since January 2023, as investors viewed it as a lower-cost carry-trade funding currency.