Abstract: This paper uses a structured dynamic factor model to measure the core inflation indicators

that reflect the long- term trend of Chinas price changes, and characterize the overall trend, overall fluctuations, sectoral trends and sectoral fluctuations of core inflation to analyze the characteristics and variation mechanism of China. The study finds that the overall price trend has gradually stabilized at this stage, and sectoral core inflation has shown a flattening after 2012. The volatility of inflation in the food and housing sectors has greatly weakened, and the volatility of inflation in the service sector has increased, indicating that the service sector may become the dominant sector in future. The synchronization of sectoral price changes has greatly weakened at this stage, indicating that the probability of serious inflation or deflation will decline. Therefore, the focus of inflation control efforts in future should be on stabilizing the fluctuation of sector prices, which will also become an important guarantee for the economy to move towards high-quality development. 

Key words: core inflation, inflation structure, structured dynamic factor model