Development and Reform Commission: This round of price increases will approach the turning point

The year of the "Twelfth Five-Year Plan" started more than halfway. Looking back at the economic situation in the first half of the year, China’s economy continues to maintain a stable growth trend, and while it is in the direction of macroeconomic regulation and control, inflationary pressure remains high. Last weekend, the Political Bureau of the CPC Central Committee held a meeting and pointed out that it is necessary to insist on stabilizing the general price level as the primary task of macro-control. Prior to this, Premier Wen Jiabao also presided over the economic symposium several times, emphasizing the importance of stabilizing prices for macroeconomic control.

Currently, experts and research institutions have different views on the main factors affecting the current price increase and future price trends. On the 22nd, Zhou Wangjun, deputy director of the price division of the National Development and Reform Commission, said in an exclusive interview with the Chinese government network and exchanges with netizens that this round of price increase was close to the inflection point and there was no risk of losing control. The price situation in the second half was more optimistic than the first half.

The cautious optimism about the price situation in the second half of the year For this year's price trend, Zhou Wangjun’s basic judgment is that although prices continued to rise in the first half of the year, from the 4.9% in the beginning of the year to 6.4% in June, showing a high level of operation. However, he still holds a "cautiously optimistic" attitude toward price trends in the second half of the year.

In this regard, he analyzed the four reasons. First, from an international point of view, the current commodity prices in the international market have significantly declined from April. After the impact has been transmitted, the import impact on the country after September will be affected. Second, domestic currency control played an active role. In May and June, the growth rate of M2 fell back to the target set at 15.1% and 15.9% respectively. The decrease in liquidity will play a fundamental role in stabilizing prices; The supply of important domestic commodities is guaranteed, including a bumper harvest of summer crops, a 2.5% increase in output, and ample supply of meat, poultry, eggs, vegetables, and industrial consumer goods. Fourth, from the price trend since 2000, this century has seen three price increases. : The first time was from 2003 to 2004, and the second time was from 2007 to 2008. This is the third time since last year. "The first round lasted 27 months, and the second round lasted 24 months. This round of price increase has continued for 24 months now. According to the cycle of price fluctuations, this round of price increases should be close to the inflection point."

In addition, the hikes factor is also rapidly falling. The 3.7 percentage points in June's 6.4% increase in CPI was affected by the tail-tailing factor. By July, the impact of tail-tailing factors will fall by 0.4 percentage points to 3.3%. In August, September and October, the carryover factor will fall rapidly from month to month. In the first half of the year, the overall effect of hikes was 3.3 percentage points; in the second half of the year, the hikes factor was only 1.7 percentage points, a decrease of 1.6 percentage points.

"As far as the current situation is concerned, it is determined that the price situation in the second half of the year will be more optimistic than in the first half of the year." Zhou Wangjun said.

The price rise is within the controllable range. Regarding the worries caused by the current rapid price increase, Zhou Wangjun believes that the price increase is within controllable range and there is no danger of losing control.

In particular, he mentioned that some recent so-called “rising pork prices led the CPI to rise” and believed that the sharp increase in live hog prices was mainly caused by the reduction in supply and the imbalance between supply and demand in the short term. In addition, the pig price was too low last year. Pigs slaughter sows in large numbers, affecting the post-stuffing, and due to climatic reasons, many epidemics have resulted in high pig mortality and aggravated pork prices. "Of course, the cost of raising is also an important reason. Higher corn prices, epidemic prevention costs and transportation costs have further boosted the cost of pig breeding."

However, Zhou Wangjun said that due to the obvious cyclical nature of pig production, and that the government’s macro regulation and control is playing an active role, the price of pork should be basically stable or steadily increased slightly before the Spring Festival next year. He reminded the farmers that they should not overfill the bar to avoid large losses in the future.

From the aspect of hog farming to production materials and consumer goods, Zhou Wangjun analyzed that at present, these price increases have gradually stabilized, which is a positive signal. On the other hand, it is currently in a global price increase. Data show that in June, the overall price level in Russia rose by 9.4%, India rose by 8.7%, and Brazil rose by 6.7%. In addition to these developing countries, the developed countries also witnessed significant price increases, such as 3.6% in the United States, 4.2% in the United Kingdom, and 2.7% in the euro zone. Therefore, the world is in a trend of inflation, and central banks will also take measures to control the rise in prices. “The European Central Bank has already added interest once in the first half of the year,” he believes. From the perspective of China, it is entirely possible to control prices in a reasonable range.

Establish mechanisms to ensure the life of low-income groups Zhou Wangjun said that according to the current high price level, the country has introduced a number of control measures to ensure the lives of low-income groups.

First of all, we are concerned about social assistance and security standards linked with price increases linked linkage mechanism. A few days ago, the National Development and Reform Commission and relevant departments issued documents requiring the provinces to establish this linkage mechanism before the end of this year. At present, 19 provinces, municipalities and autonomous regions have achieved this goal. He said that this is a long-term measure to ensure the life of low-income groups. After the establishment of the system, it can cover more than 90 million people. At the same time, from the Spring Festival this year, local governments have taken corresponding measures.

Provision of temporary price subsidies for low-income groups. Based on the first two policy measures, 28 provinces, municipalities, and autonomous regions adjusted the minimum wage standard last year, and the adjustment rate generally exceeded 20%.

“It can be said that as the country’s financial resources increase, and social security systems such as pensions and medical care are improved, it will fundamentally increase the economic affordability and psychological endurance of low-income groups in response to rising prices.”

Regarding the question raised by netizens as to “whether the establishment of this mechanism will lead to an increase in prices”, he explained that since the linkage mechanism is mainly directed at the problem of low-income groups coping with rising prices, this part of the population has only more than 90 million, accounting for the total The proportion of the population is less than one-tenth, so there is no need to worry about the above.