I am not very sure china but there are 2 mamor reasons why the Fed bases its interest rate decisions on core PCE: 1. food and energy prices are too volatile to relfect the true underlying inflation. 2. The share of food (for instance) in total consumer spending is relatively small in the U.S. About 13% in the US vs. in China it is much higher, around 40%, making their CPI more sensitive to food prices there.
