Falling trend of inflation has emerged is the key to control food prices

 Inflation has become a major contradiction in the stage of economic operation, if not objective quantitative analysis, but starting from a number of appearances, blindly exaggerated inflation expectations, there may have fueled inflation. This not only seriously affect the healthy operation of the Chinese economy, even the positive effects of macro hedging. Therefore, it is necessary to adopt a scientific quantitative analysis to identify the main factors of inflation, find out the policy focus, yielding inflation

affect inflation in the current factors, the labor prices, the input raw material prices impact on prices has been significantly exaggerated; and Super-currency as one of the main drivers of inflation, the effects are gradually reduced; short-term and structural increase in food prices is still the main cause of current inflation.

wages rose 15%

prices will rise 1.94%

empirical observations show that China's rising labor costs and rising prices there is no obvious correlation. For example: from 2003 to 2009 average annual growth rate of wages as high as 14.8%, but CPI were mixed in different years, and even the east coast in 2009, a

we found that rising labor costs in China, conducted prior to the final consumer price, to lead a

First, Agricultural labor costs on food prices of 41% conductivity, conductivity of vegetables was 40%, the conductivity of the meat is 10%, the integrated conductivity of the food was 27%; prices for industrial products manufacturing wages The conductivity of not more than 10%; service pay the price of services conductivity is 21% - according to the composition of CPI weighting integrated conductivity of the wage costs of less than 20%. Assume that the average wage in China rose 15% a year, then push prices up to 2.98%.

Secondly, the industry labor productivity can also relieve some upward pressure on labor costs. After considering the actual labor productivity, a 15% wage increase on the general price level of China's reduced to about 2%.

In addition, for those over-competitive industry, profits of the enterprise flexibility, the impact of rising labor costs, corporate profits are often not the product price.

Finally, in part transmitted to the consumer before the circulation can absorb some of the labor costs. At present, the total price of our products, the mobile part of accounting for far more than the international average, with the wholesale, retail, logistics management level, digestion and circulation space for upward pressure on labor costs remain high.

After filtering through the four
, assuming an average price of China's labor force increased by 15%, and its transfer to the general level of CPI of 0.89% -2.98% of the value of only 1.94%. The current stage, it should not exaggerate the rise in labor costs, the impact on prices.

price increases of raw materials

less than expected

a lot of people are talking about, the rise in commodity prices of raw materials to China will certainly conducted the general price level. But why a few years ago the oil from the dollar rose to 140 dollars a dozen, when plastics and other downstream household chemicals prices do not sync up? N-fold increase in iron ore prices, the why the car is not only not raising their prices, but prices fall? After n times of rising copper prices, why air conditioning prices remained stable?

reason and labor costs, Enter the impact of rising raw material prices; again, the profits of the enterprise flexibility absorb some cost increases; Finally, the profit elasticity of circulation filter.

the four filters and labor is different, the input raw material cost pressures are not digested in an enterprise, but rather spread over the whole industry chain digestion. Suppose a vertical industries in 10 industrial chain, rose 30% in the prices of raw materials under the impact of each of the industrial chain business labor productivity increased by 3%, or chain of each industry profits, 3% elastic compression space, can digest all the raw material cost pressure.

Therefore, the same price range, the input raw material prices impact on prices is much less than the price of labor. Our calculations show that the input of raw materials prices rose an average of 15%, the impact of China's CPI 0.3%, far below market expectations.

Super-money

how many into the real economy

put a lot of people due to monetary causes of inflation, super-hair, that made the past few years over the role of the currency to the price anyway, thus announced that China is difficult to control inflation. For example: Last year, with a view of money accumulated over recent years, made 48 trillion. Assume that this figure is correct, then the net off the new 2010 8 trillion yuan in 2009, not that super-fat 40 billion? Why 2009 is the deflation?

Clearly, the balance of those who simply M2 and GDP out to be a division or subtraction, even if the

from the money supply structure, in addition to the traditional central bank issued base money, commercial banks to extend credit, the entrusted loans, trust loans, foreign capital inflows, capital markets and asset markets have become the currency of the expansion to create a new way. Like 30 years ago Hayek once said: reflect the full picture of the money supply, need to be

, of course, change is a greater demand for money structure. The traditional physical demand economic transactions demand for money is only part of the new asset markets, capital market investment and speculative demand for money increasing, the central bank, commercial banks and other financial institutions, funds are more and more precipitation .

the past decade, China's real estate market, collectibles, art market funds to absorb the number of conservative estimate of 8.9 trillion yuan; the past decade, China's stock market funds to absorb a net total of 9.6 trillion yuan, the futures market, financial derivatives market also needs huge money to support their daily trading. In addition, the central bank by total absorption of the central counting monetary tools such as 4 trillion; there are 24 trillion difference between deposit and loan balance of the central bank and commercial banks were absorbed.

weed out the capital markets, asset markets, after the central bank and financial institutions to absorb the balance of broad money, it may flow into the real economy, and the impact on consumer prices.

Our study shows that, after a four-absorbed in 2010, the Chinese currency trading real economy is only 34.8 trillion yuan, the currency unit of GDP, although the quantity has increased significantly, but the increase is far less than market expectations.

taking into account the surplus money to absorb the excess capacity in the first and only performance of inflation, four absorption unit GDP impact of money supply on prices to lag two years. Since 2009, the currency unit of GDP below the 2008 growth rate of volume growth, so China's currency factors from 2011, price pressures should be less than 2010.

course, if the real estate funds, stock funds back to the real economy, or the difference between deposit and loan balances of banks and thus reduce the flow of money to increase the real economy, the currency caused by price pressures will increase significantly. Therefore, in addition to the central bank and commercial banks to manage the For example, if the real economy, appropriate the funds into the stock market, inflationary pressures will be conducive to resolving stage.

control of food prices is the key

Statistics show that the main cause of inflation in recent times is still the food prices. CPI rose high in the early November, food prices contributed 3 / 4 of the price increase over the same period of the

and 2007's

accordance with the general experience of the production cycle and data projection, Space does not exceed 2007, 2008, that an inflation.

pessimistic on inflation and scholars tend to factor in long-term impact of food inflation of, exaggerated, or even the causes of the rising food prices and labor prices, currency factors super-fat mix.

In fact, the main reason for food inflation is caused by cyclical fluctuations in supply. With the advent of spring, vegetables in most parts of China is about to usher in the fourth quarter of last year, prices of supplies after the first peak. Although the February year on year price increase may still be largely flat with January, but in March, the prices of vegetables rose to lead the CPI should be somewhat lower.

Therefore, timely transfers to increase food supply, through financial subsidies and other ways to increase the supply of meat, so as to maintain prices, the basic stability of meat prices has become very important - the key to managing the current round of inflation, or manage food prices.

Overall, this round of inflation in both the current labor force, land, resources and other elements of long-term factors in prices, there are seasonal short-term factors; both demand factors, supply factors also; both domestic factors, but also overseas input factors; both factors of the real economy itself, but also inflation and monetary factors ... ... Although the situation is more complex, but not the long term of short-term factors, factors that exaggerated the long-term structural problems or the comprehensive. Vegetable prices fall as the Spring Festival, gradually emerging effects of monetary control, such as pillar industries of real estate and automotive supply and demand changes, inflation down trend has emerged. Expected to continue as long as the correct guidance, manage and money, manage food prices, the annual inflation rate was controlled to within 4% of the target is still possible to achieve. (Tengtai)