Zhang Ping: In June, The Probability Of PPI Turning Negative Was Larger.

Cheng Zhu, deputy director of the national finance and development laboratory, in April 1st, on the "in-depth recommendation of the structural reform of the financial supply side - the national finance and development laboratory Annual Conference (2019)", in 2019, with the slowdown of the economy, it is estimated that PPI will turn negative in the second quarter and enter the state of deflation in April 1st.

Zhang Ping believes that the deflation of the current round includes three characteristics: first, the PPI turnover in 2019 is a useful amendment to the excessive increase in PPI in the previous two years, because the upstream PPI has eroded the profits of the middle and lower reaches of the enterprise; the moderate deflation itself has the effect of allocation and correction; two, the current deflation is related to the slowdown of the economic growth, but it is also greatly influenced by the PPI tail factor. It is expected that the tail factor will turn negative in August 2019, and the probability of turning over in June this year will be greater, but it will not be very serious. Three, the main reflection of PPI is the manufacturing industry, while the proportion of manufacturing industry in China's economy is declining, and the impact of PPI on the overall economy is weakening.

Zhang Ping pointed out that the main reason for the positive and negative conversion of PPI is that the "clean-up mechanism" in the supply side reform is not yet sound, and it is difficult to dispose of the "zombie enterprises" and the bubble burst companies effectively.

Zhang Ping believes that China's supply side structural reform should speed up industrial restructuring, clean up "zombie enterprises" in the industry, encourage industrial innovation and improve industrial efficiency. In the process of promoting reform, we should pay attention to building up the mechanism of "cleaning up" and "preventing risk proliferation", and putting the limited expansion emphasis on the short board to better promote the structural reform of supply side.

Zhang Ping said that there is no need to be particularly panic about the pfer of PPI in 2019, but we should also guard against the debt deflation accumulated in the downlink cycle of the economy - deflation mechanism, as well as the rise in real interest rates caused by deflation, the decline in corporate profits and the reduction of state revenue.

On the one hand, we must prevent deflation from deteriorating. On the other hand, we should take advantage of the opportunity of deflation to adjust the uneven distribution of profits between upstream and downstream, further accelerate the pace of industrial restructuring, and continue to push forward structural reform of supply side.