The State Council Counselor Said Inflation Was Related To 4 Trillion.

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There are different opinions on the background and root of this inflation. It is different from others. There are too many low interest rates. There are foreign hot money, which is caused by the rise in international commodity prices, and also the shortage of migrant workers and the rise in wages.

It should be said that all these factors exist objectively, and they play a certain role in this inflation.

But in recent years, the steep rise of prices is not just caused by these reasons.

When money is obviously overvalued and unrealistically overinvested, inflation will be generated.

This is the basic logic and path of inflation.

In the early 90s of last century, I worked in Beihai, and was influenced by Deng Xiaoping's southern tour speech and Beihai's propaganda and encouragement. Businessmen from all over the country, Hong Kong, Macao and Taiwan and foreign countries went to Beihai with a lot of money in 1992. Excessive money inflows were used to invest in land, build houses, and lead to a large influx of funds into society.

On one occasion, a company went public, and less than three days later, 24 billion of the money flowed into Beihai.

Many enterprises, under the strong support of banks, have invested unrealistically and increased the flood of social capital and the formation of economic bubbles.

Therefore, prices have naturally increased and inflation has taken place.

The inflation in China has been constantly pushed up, which is actually related to excessive bank money, excessive investment and large flow of capital to society.

It can also be said that this is one of the precursors and appearances of the economic bubble formation.

Since 2003, the rapid expansion of the financial sector has significantly exceeded the growth of the total economy.

The total assets of the central bank were 5 trillion and 110 billion yuan at the end of 2002, up to 26 trillion yuan and 4.09 times in 2010; the total assets of the bank were 23 trillion yuan in 2002 and 94 trillion yuan in 2010, and increased by 3.09 times.

The general currency (M2) was 18 trillion and 500 billion yuan in 2002 and 72 trillion and 500 billion yuan in 2010, up 2.92 times, while the total economic growth was only 2.31 times that of the same period.

The growth rate of the central bank, bank assets and broad money is much faster than that of the total economy.

Too much money and too much investment will drive excessive investment.

If investment can generate profits faster or drive the absorption of funds, it may be better. Fear is excessive investment or no supply at all, or no immediate benefit. It is bound to bubble and cause inflation.

The outbreak of overinvestment is related to the financial crisis. In order to increase investment and stimulate economic recovery and prevent the crisis from aggravating, it was absolutely necessary for the central government to invest 4 trillion yuan in 2009.

However, the expansion of this investment mainly focused on the government and state owned enterprises, resulting in a huge scale of project stalls.

Including high-speed rail, highways, airports and many so-called "

Take two examples that have been seen and surveyed on the spot.

A large state-owned coal enterprise built their bricks with coal gangue and made Kaolin from another stone in the coal. They built beautiful production plants and spent a lot of investment.

However, because the product can not find the market, the factory which is large and very modern is in a state of shutdown.

A less developed city has a population of 3 million. In the 80s of last century, the municipal government used only 1500 square meters of housing, and a new office building was built in 90s.

Thus, under the situation of big investment, a new municipal government building was built, with a total area of 120 thousand square meters and 1 billion 200 million yuan of funds spent.

The municipal government square is 1.5 square kilometers, together with the office space, 1.5 kilometers wide and 2.5 kilometers long.

Such a huge investment and no benefit projects are not the only ones but actually happen all over the country.

According to relevant information, the marginal output effect of China has been plummeting since 1994.

From 0.39 in 1992 to 0.2 in 2009, that is to say, in the early 90s of last century, 2~3 investment units could create a GDP increment. Up to now, 5 investment units often do not get a GDP, which means that there has been a large area of resources misallocation and wrong investment.

That is to say, when resources are allocated to projects with low productivity, it is difficult to produce enough products and services to absorb large quantities of money in the market.

The deterioration of investment is the root cause of inflation.

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Poverty alleviation and inflation

In view of the real reasons for the above inflation, in order to return the money and curb inflation, the more important thing for the state is to make good use of national finance and reform financial investment.

For this reason:

Straighten out and reform the growth pattern of banks.

In particular, we should cut off the growth of bank money and the income of banks' internal staff and reduce the impulse of monetary growth.

We must resolutely change the direction of money input, change the old habits of "big and light, small and poor, love the rich", and reduce inefficient investment and ineffective investment.

Great efforts should be made to support the development of small and medium-sized enterprises and the third industry.

In many countries, there are 45 small and medium-sized enterprises, but only 10 in China. Small and medium enterprises are too few and business policies are too strict, which is not conducive to people's entrepreneurship, and is not conducive to the growth of the middle class.

The number of entrepreneurial students in our country is only 2%, compared with 15% to 20% abroad, the number of entrepreneurs is far less.

Up to now, the third industry in China has only accounted for 42%, compared with 60% to 70% in developed countries, there is still huge room for development.

Only by reforming the direction of money input can we reduce the ineffective investment and reduce the risk of inflation to a minimum.

We should reform the financial pfer system, increase the support for social security, and expand the coverage of social security.

China's fiscal growth of more than 20% per year, and how to allocate and allocate more than 8 billion huge amounts of funds is of great significance to China's economic and social development and stability, to inflation control and to prevent inflation from continuing.

We should vigorously increase the input of social security for residents.

At present, the total input of social security in China accounts for 6% of GDP, accounting for 12% of the total fiscal cost. If we consider the non fiscal revenue in the budget, social security accounts for about 7% more than the total expenditure of the social security, which is 25% to 30% of the foreign social security GDP, accounting for 35% to 45% of the fiscal 35%.

In order to enhance the residents' ability to resist inflation and improve the ability of social consumption, we should reform the routine of pfer payment, reduce administrative expenses, and compress the construction and input of public products with hidden loopholes.

We must formulate necessary laws to restrict the income of staff and workers of state-owned monopolies and state-owned banks, especially those of management.

China's industrial income gap is as high as 1:15, while Japan is 1:1.6 to 2, Germany, Canada, the United States and South Korea are 1:2.3 to 3.1.

Such a large income gap is directly related to the high distribution and high income of state-owned monopoly enterprises.

In this regard, attention must be paid to strengthening supervision to prevent greater income gap.

We must strictly control the development of real estate and make good use of the land.

We must unswervingly vigorously develop housing security, solve rigid demand, and properly handle banks' previous loans to real estate and further curb the impulses of banks to real estate loans, so as to prevent sequelae and prevent bubbles from breaking up.

It is also necessary to crack down on the collusion between minority banks and real estate developers, and to make profits by selling large quantities of loans to Real Estate Company executives and selling houses.

The whole society should strengthen moral construction and strengthen the work of helping the poor.

According to the survey, a municipality directly under the central government accounts for 75% of young crime, 75% of which are theft and robbery. The Zhengzhou Public Security Bureau has trained 2000 college students to help steal thieves.

There are so many thieves in a society, which shows that our income distribution is out of order. At the same time, it shows that our poor work has not kept pace.

To this end, the financial structure of our government should change the trend of expenditure and adjust the expenditure of finance. According to the innovative social management proposed by General Secretary Hu, we should concentrate more on tackling the root causes of the problem, and use these funds to narrow the income gap in order to reduce poverty and reduce crime.

In short, the occurrence of inflation is directly related to the amount of money and the use and distribution of money. It is a systematic project to control inflation and prevent inflation from continuing. There are both economic projects and social projects.