Tao Dong: China'S Inflation Rate Will Reach 6% Early Next Year.

In December 21st, Tao Dong, the managing director of Credit Suisse and Asia chief economic analyst in Beijing, predicted that in addition to excess liquidity, service sector wage growth would be the second inflation factor. He predicted that China's inflation rate would be 6% at the beginning of next year.

"There are supply factors, demand factors, but more liquidity factors and new expectations," Tao said.

There is no real change in liquidity today. "

Moreover, inflation will not only be reflected in the price rise of agricultural products in 2011, but inflation will inevitably bring about inflation in service sector in 2010.

For next year's inflation situation, Tao Dong predicts that China's inflation rate will be 6% at the beginning of next year.

Moreover, China's inflation rate of 1% and 2% has passed, and the average inflation rate in the next few years may be 4%.

But he also said that 4% of inflation is not very scary for a rapidly developing emerging country. The key is that China's market and policymakers must have a correct attitude towards inflation in the medium term.

"Instead of saying that inflation is horrible, it is better to say that we are more fearful of inflation figures."

He also predicted that the size of loans next year will remain above 7 trillion.

At the same time, interest rates will rise by 150-200 basis points next year, and the reserve requirement will be raised by another 150 basis points to 20%.

In the second half of 2010, the domestic price index climbed steadily, and CPI reached a high of 5.1% in November.

The government's preset line for annual inflation is 3%, but many people predict that inflation will exceed 3% this year.

The "blue book" released by the Academy of Social Sciences at the end of the year indicates that the consumption value index CPI of the residents increased by 3.2% this year and increased to 3.3% next year.

For the next year's inflation situation, many agencies have made predictions.

Deutsche Bank's December 20th world and China economic outlook released in 2011 showed that China's inflation rate will continue to rise in the first half of 2011, but may decline in the second half.

The macro group of CITIC Securities Research Group believes that all the way up inflation is likely to change in 2011. The momentum of inflation will weaken after the Spring Festival, and will generally show the former high and low price bureau. It is estimated that CPI will rise by about 3.8% in 2011.

Liao Qun, senior vice president of CITIC Bank, expects that a new round of quantitative easing policy in the US will bring in excess capital, coupled with rising prices of agricultural products and commodities.

Inflation is expected to rise to 3.8% next year.

At the same time, the speed of RMB appreciation will also accelerate to 4%-6% from the expected 3%-5%.