Why China'S CPI Needs To Be Controlled

The consumer price index (CPI) in March has been released this year.

CPI rose 2.3% in March, while the 1-3 month average CPI level rose 2.1% over the same period last year.

It is lower than the market expected increase of 2.5%.

The main factor affecting the rise of CPI in March is food, tobacco and alcohol.

In March, the price of food, tobacco and alcohol rose by 6% compared to the same period last year, which affected CPI's rise of about 1.78 percentage points.

Among them, the price of fresh vegetables rose by 35.8%, which affected the increase of CPI by about 0.92 percentage points, and the price of livestock and meat increased by 16.5%, which affected the rise of CPI by about 0.69 percentage points (28.4% of pork prices, which affected the rise of CPI by 0.64 percentage points). Grain prices rose 0.5%, affecting CPI's rise by 0.01 percentage points.

Traffic and communications prices fell by 2.6%.

As CPI will control below 3% this year, a one-year deposit rate of 1.5% will increase the central bank's interest rate cut again.

Of course, how the specific situation, the estimate is not meet the recruitment.

Judging from the factors that affect the rise of CPI in March, the main reason is the food and alcoholic drinks, especially the price of fresh vegetables * 35.8% and pork prices rise by nearly 28.4%.

Some people say that China's CPI is basically based on the pig cycle, that is, the rise in pork prices will easily lead to the rise of CPI; if the price of pork is down, CPI will also go down.

However, the situation in March is a reflection of this, but

The reflection is smaller.

Because pork and vegetable prices rose in March, it was already obvious at the beginning of the month. According to the data released in March 9th, the price of live pigs increased by more than 50% over the same period, and began to enter the "yellow warning zone".

By the end of March, the price had reached a new high of 5 years, approaching the highest point in 2011.

At that time, many economists were worried that if China's economy entered the "pig cycle", CPI might rise.

In addition, the price of vegetables in most parts of China has been rising since the Spring Festival because of the Spring Festival.

For instance, vegetables in Guangzhou rose by 50 yuan a kilogram.

This trend eased after the Spring Festival, but rose again in March.

For example, Beijing people want to eat Shandong green onion, two yuan to 10 yuan, Guangzhou to buy a pound of cabbage heart to 10 yuan.

Also, from the statistics of vegetable weighted average price in Beijing, the average price of vegetables in March increased by more than 5 over the same period last year.

This vegetable price rise is different from the previous one. This round of vegetable prices went up crazily. It also showed that the price of northern vegetables increased in spring. The South would bring a lot of vegetables to the north to stabilize the market price. But this year, the situation is that the south is scramble for food in the north.

All these indicate that the trend of pork prices and vegetable prices has not changed since the beginning of this year, and the rate of increase is even greater in March, such as pork.

Because market analysis, CPI, the actual increase may be higher than the published data.

At the same time, this situation also shows that the rising trend of CPI is out of the worry of many people.

But the number of explanations will not rise much faster, even if the Chinese economy enters the "pig cycle".

Because China's CPI is controllable.

Why China

We need to control it. Because last month, China's CPI rose to 2.3%, while the residents' one-year deposit rate was 1.5%, and the real interest rate was 0.8%.

That is to say, China has entered a serious negative interest rate stage.

If CPI rises faster, the negative interest rate of residents deposits will be higher.

The negative interest rate caused by the central bank's direct interest rate control on commercial banks, if the negative interest rate is too high, will not only seriously restrict the monetary policy of the Central Bank of China, that is, the central bank can not make monetary policy more relaxed by adjusting the interest rate, it is also a wealth pfer mechanism for bank depositors.

This wealth pfer mechanism is not only easy to drive more deposits away from the banking system, but also lead to more liquidity in China's financial market.

The liquidity of China's financial market is the root cause of instability and risk in China's financial market.

These two aspects do not want to see the central bank.

Therefore, it is best to stabilize CPI at a certain level.