Price Rise: No Winner &Nbsp Under High Prices; Containment Is Not Difficult.

Multiple factors lead to price rise.

And past

First, loose monetary policy is the fundamental reason for rising prices.

After the outbreak of the world financial crisis, in order to expand domestic demand and stimulate economic growth, China has implemented a proactive fiscal policy and a loose monetary policy, which has imposed a strong intervention in the macro-economy.

Thus, the scale of 4 trillion yuan was launched.

Statistics show that at the end of 12 in 2008, the balance of the broad money supply (M2) in China was 47 trillion and 520 billion yuan. At the end of 2009, the figure reached 61 trillion and 20 billion yuan, reaching 72 trillion and 590 billion yuan at the end of 2010, especially the broad money supply increased by 28.4% at the end of 2009, which caused the rate of money supply to exceed the growth rate of GDP at the same time.

The substantial increase in money supply, of course, can effectively stimulate economic growth, but it also results in excess liquidity, that is, usually money is scarce, which will inevitably lead to price increases.

Second, rising costs push prices up.

Since 2010, many coastal developed provinces have adjusted the statutory minimum wage standard by an average of 20%, which alleviated the problem of "shortage of migrant workers" to a certain extent, but led to an increase in labor costs.

Besides, raw material cost, logistics cost and fuel power cost increase in different ranges.

No matter what kind of cost increases, enterprises will naturally try their best to pass on the price of products.

Third, external import factors have increasingly become an important driver of price increases.

If China's price rise can be more internal factors, then as China's economy becomes more and more integrated into the world economy, every move of the other countries will inevitably affect China's economy and price level.

Since the outbreak of the financial crisis, the United States has launched two rounds of quantitative easing policy in order to stimulate the economy. Its essence is to save the economy by putting a huge amount of US dollars into the market.

However, unlike other currencies, the dollar is the most important reserve currency in the world.

Many of the US's additional money has been flowing into China through international trade. The larger the foreign trade surplus and the more foreign exchange reserves, the more money issued by US dollar will increase the amount of money invested in China.

At the same time, as the US dollar depreciates deliberately, the price of international commodity in dollar denominated is rising rapidly, not only for wheat, corn, soybean and other grain commodities.

No winner at high prices

High prices not only raise the cost of production, increase the living expenses of the residents, but also affect the smooth and healthy operation of the national economy.

For the country, high prices cause economic instability and increase the difficulty of macroeconomic regulation and control.

On the one hand, the pressure of domestic inflation is significant. On the other hand, the economy of the developed economies of the United States, Japan and Europe has not improved significantly. Expanding domestic demand is still the driving force for economic growth, but high prices also need to reduce the expansionary nature of macroeconomic policies.

Loose and tight, how to handle it is a great test to the government.

For enterprises, price increases increase production costs.

Under such circumstances, enterprises in order to ensure that profits will not be reduced, it is natural to think of raising the prices of factory products.

However, the current market is still dominated by buyer's market. Under fierce market competition, most enterprises will probably have to digest some or even a large part of their production costs.

If prices drive the continuous rise of production costs, many enterprises will have a hard time, and those enterprises with poor strength will not survive and fail.

For residents, there is a pain in the face of high prices.

The rising prices of necessities such as meat, eggs, grain and oil have a direct impact on the daily life of ordinary people and lead to rising living costs.

Even if wages are linked to prices, the corresponding increase will be limited. It is difficult to surpass the increase in prices, otherwise it will lead to a spiral rise in prices and wages, resulting in hyperinflation.

Therefore, the consequence of high prices is to reduce the real purchasing power of the people and bring them a lot of life pressure.

The negative impact of high prices is not much different between urban people and rural people.

On the face of it, the rise of agricultural prices will benefit farmers, but after careful analysis, it will be found that this is not the case.

First of all, the price of agricultural products has risen, but the cost of production, that is, the price of agricultural products, is also rising, and it often goes up even more.

The increase of agricultural production cost will inevitably erode the direct benefits brought by the rising price of agricultural products to farmers.

Not only that, but because of the obvious rise in the price of daily necessities under high prices, the cost of living of farmers is also rising, even higher than the cost of living in urban areas.

For example, according to statistics, in August this year, the national consumer price level rose 6.2% year-on-year.

Among them, the city rose by 5.9%, and the countryside rose by 6.7%.

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Secondly, the price increase of some agricultural products is due to the increase of logistics cost.

More circulation, various toll and tolls, market entry fees, booth fees, and duplication of Taxation on logistics enterprises, on the one hand, cause prices of agricultural products to rise. On the other hand, farmers do not get tangible benefits.

Another situation is the speculation of hot money on agricultural products.

Loose monetary policy makes the market liquidity abundant, in the stock market slump, the housing market is uncertain, a large number of hot money began to enter the agricultural product market for speculation, man-made market panic, profit from it.

To a large extent, it has nothing to do with the actual supply and demand, but is a kind of "financial" behavior, and some agricultural products will be the object of financial speculation.

Since last year, such as "garlic you ruthless", "beans you play", "Ginger you army" and other popular terms, is a vivid portrayal of this kind of hot money speculation. It not only fuels the high prices, but also harms the farmers who are already in a weak position.

The difficulty of curbing high prices is not small.

The reason for this rising price is relatively complicated. There are internal factors that we can control, and external factors that we can hardly control. Moreover, external factors will become increasingly important in the cause of high prices.

The United States has implemented two rounds of quantitative easing policy, but the economy has no substantive improvement; Europe is sinking into an increasingly serious debt crisis; the Japanese economy continues to "lose".

The economic plight of the developed economies is full of uncertainty about the prospects of the world economy.

Especially if the "irresponsible" monetary policy of the United States does not change its course, it will cause a series of harm to other countries and become a source of inflationary pressure to the world.

Under the influence of inertia, prices can not suddenly turn from high to low.

Moreover, we are faced with the dilemma of macroeconomic regulation and control. We should pay attention to the intensity of monetary contraction to resist inflation, and avoid the hard landing of the economy because of the excessive force.

It is still more than 3 months away from the end of the year. According to the rising trend of prices in the first 8 months, it will be more difficult for us to control the CPI in 2011 by about 4%.

(Zhang Deyong, Institute of Finance and trade economics, Chinese Academy of Social Sciences)

Multiple factors lead to price rise.

Unlike demand driven prices rising from overheated demand and overheated demand in the past, this round of price rises has taken place in the background of loose monetary policies of major economies in the world against the "subprime mortgage crisis" in the United States. There are both internal factors and external factors.

First, loose monetary policy is the fundamental reason for rising prices.

After the outbreak of the world financial crisis, in order to expand domestic demand and stimulate economic growth, China has implemented a proactive fiscal policy and a loose monetary policy, which has imposed a strong intervention in the macro-economy.

As a result, a massive stimulus plan of 4 trillion yuan was launched, and as a lever, leveraging more large-scale credit capital investment.

Statistics show that at the end of 12 in 2008, the balance of the broad money supply (M2) in China was 47 trillion and 520 billion yuan. At the end of 2009, the figure reached 61 trillion and 20 billion yuan, reaching 72 trillion and 590 billion yuan at the end of 2010, especially the broad money supply increased by 28.4% at the end of 2009, which caused the rate of money supply to exceed the growth rate of GDP at the same time.

The substantial increase in money supply, of course, can effectively stimulate economic growth, but it also results in excess liquidity, that is, usually money is scarce, which will inevitably lead to price increases.

Second, rising costs push prices up.

Since 2010, many coastal developed provinces have adjusted the statutory minimum wage standard by an average of 20%, which alleviated the problem of "shortage of migrant workers" to a certain extent, but led to an increase in labor costs.

Besides, raw material cost, logistics cost and fuel power cost increase in different ranges.

No matter what kind of cost increases, enterprises will naturally try their best to pass on the price of products.

Third, external import factors have increasingly become an important driver of price increases.

If China's price rise can be more internal factors, then as China's economy becomes more and more integrated into the world economy, every move of the other countries will inevitably affect China's economy and price level.

Since the outbreak of the financial crisis, the United States has launched two rounds of quantitative easing policy in order to stimulate the economy. Its essence is to save the economy by putting a huge amount of US dollars into the market.

However, unlike other currencies, the dollar is the most important reserve currency in the world.

Many of the US's additional money has been flowing into China through international trade. The larger the foreign trade surplus and the more foreign exchange reserves, the more money issued by US dollar will increase the amount of money invested in China.

At the same time, as the US dollar deliberately depreciated, the price of international commodity prices rising in the US dollar rose rapidly, not only the price of wheat, corn, soybean and other grain commodities rose, but also the prices of crude oil, coal and iron ore soared.

China is an important importer of bulk commodities. Through the pmission of import links, the substantial increase in prices of these commodities will directly increase the production cost of Chinese enterprises and eventually lead to the rise of consumer goods prices.

In a word, as long as the United States continues to implement a loose monetary policy and weaken the US dollar, the external incentives for China's high prices will continue to ferment.

No winner at high prices

High prices not only raise the cost of production, increase the living expenses of the residents, but also affect the smooth and healthy operation of the national economy.

For the country, high prices cause economic instability and increase the difficulty of macroeconomic regulation and control.

On the one hand, the pressure of domestic inflation is significant. On the other hand, the economy of the developed economies of the United States, Japan and Europe has not improved significantly. Expanding domestic demand is still the driving force for economic growth, but high prices also need to reduce the expansionary nature of macroeconomic policies.

Loose and tight, how to handle it is a great test to the government.

For enterprises, the rise in price increases the cost of production.

Under such circumstances, enterprises in order to ensure that profits will not be reduced, it is natural to think of raising the prices of factory products.

However, the current market is still dominated by buyer's market. Under fierce market competition, most enterprises will probably have to digest some or even a large part of their production costs.

If prices drive the continuous rise of production costs, many enterprises will have a hard time, and those enterprises with poor strength will not survive and fail.