Is the price situation really grim?

The latest figures from the National Bureau of Statistics show November CPI Rose 5.1% year-on-year. Is the price situation really grim? Will there be full inflation in the future? And look at China's economic Prosperity Center deputy Director of Pan Jiancheng analysis-Our reporter Zhu Jianhong reading tips reform and opening up more than 30 years, the CPI average annual value of more than 5%. This year's CPI increases are accompanied by a 10% per cent growth rate, which should be considered reasonably acceptable. Inflation generally refers to a sustained and comprehensive rise in prices. There is no overall price rise. From the future, there will be no overall rise in price inflation is still in a reasonably acceptable range journalist: The public is now generally showing deep concern about the inflationary situation, the National Bureau of Statistics released the November CPI (consumer prices) rose 5.1% year-on-year.　　So is the inflation situation really grim?　　Pan Jiancheng: First, we need to understand what the 5.1% CPI gain means. In the more than 30 years of reform and opening up, the CPI averaged more than 5%, with 1/3 years exceeding 6%, two inflation peaks in 1988 and 1994 CPI respectively reaching 18.8% and 24.1%. This year, even as some experts expect the full-year CPI to be around 3.3%, it is much lower than the more than 30-year average CPI and significantly below the 4.8% and 2008 5.9% in the 2007 years before the international financial crisis.　　Moreover, the CPI increase is accompanied by a relatively fast growth rate of about 10% per cent, which should be considered a reasonably acceptable range.　　Journalist: So why is the current price rise so strong a social response? Pan Jiancheng: I think this strong reaction is indicative of inflationary expectations that are closely related to the social public psyche.　　There are several main reasons. First, the price rise comes mainly from the sharp rise in the price of food, especially fresh food. CPI Rose 5.1% in November, with food prices up 11.7%, food prices up 14.7%, and fresh food prices rising 21.3% per cent.　　The price of fresh vegetables is closely related to the daily life of ordinary people, especially the low and middle income families are very sensitive to the fluctuation of the price of fresh vegetables. Second, since the beginning of the year by the economic recovery led to rapid demand growth and Foxconn events and other factors, the nationwide wages of migrant workers generally rise, and energy products, non-ferrous materials and other primary product prices due to the international market fluctuations have risen sharply, of which the first three quarters of fuel power and non-ferrous metals prices rose 18.6%　　And 24.2%, analysts are proposing cost-driven or imported inflation expectations. Third, since the second half of 2009, housing prices continued to rise relatively fast to the people's inflation expectations have a greater impact.　　Although prices are largely unrelated to the CPI used to reflect inflation levels (CPI does not contain house prices, which contain only residential products or services such as rent), there are few who believe that rising prices are inflation. Four is to cope with the international financial crisis and the formation of the extraordinary growth of money and credit, in the driving economy quickly backRise, but also to a certain extent to form excess liquidity, and the United States a new round of quantitative easing monetary policy exacerbated the liquidity shock. This ample liquidity in the face of real estate regulation, and constantly seek speculative varieties, the emergence of "garlic", "mung bean" and other products irrational inflation.　　These serious speculative acts on general consumer goods have fuelled inflationary expectations among the public.　　Multiple factors decide not to have full inflation journalist: in the late 80 and the middle of the 90, our country has experienced two severe inflation, and is this serious inflation likely to come back in the near future? Pan Jiancheng: Inflation generally means that prices continue to rise comprehensively. At present, there is no overall rise in prices.　　From the future period, I am afraid there will not be a full increase. First look at the food that drives this round of price increases. Historically, periods of severe inflation have generally been linked to a rapid rise in food prices. From the current grain supply in China, there is a rare "seven increase" in the total grain production, there is no risk that the supply shortage leads to the price rising. And the rapid increase in the price of fresh vegetables and this year more disasters, adverse weather frequently caused by short-term reduction of production related. Fresh vegetables belong to labor-intensive products, the production of fresh vegetables in China has comparative advantages, production capacity is very strong.　　Fresh vegetables also belong to a completely competitive product, but also has a short production cycle, short storage period and difficult to speculate, at all levels of government to ensure the supply and circulation of fresh vegetables policy incentives and supporting measures to implement, once the production recovery, the rapid increase in the momentum of its price will naturally end. From the angle of cost promotion, in view of the fact that many industries have overcapacity in China at present, the rising of raw material and raw material price may not lead to the conduction and cause the final consumer price to rise. From the PPI (Factory price index) which reflects the cost of the enterprise, the PPI rose 6.1% in November, in which the output price of the production material rose 6.9%, and the subsistence price of the consumption price rose by 3.3%. In the production, the price of extractive industrial products in the front of the industrial chain Rose 14.6%. , the price of raw material industrial products rose 9.8%, while the industrial chain back-end processing industry products prices rose only 4.7%.　　The above results show that enterprises through the expansion of sales scale and management, technical level to a certain extent, digestion of raw materials, raw material prices increase the cost of rising pressure. Similarly, the increase in migrant workers ' wages does not necessarily affect the rise in consumer prices.　　The data of the last 10 years show that the wage level and the price increase is very weak, the wages basically in 10 years of steady growth, while the price is not only the stage of deflation, but also experienced a low level of wandering stage and a relatively fast rising stage. Finally, from the liquidity surplus to promote speculation, the recent decision makers have taken a series of tight monetary policy, such as reserve requirements, the Central Economic Work conference proposed that next year will implement a prudent monetary policy, which will have a certain degree of inhibition of liquidity. In addition, the relevant departments continue to increase the livelihood of products involved in the fight against speculative activities, to avoidThe spread of "garlic", "mung bean" and other hype will effectively curb inflation expectations arising from speculative activity.　　The key to preventing inflation today remains the management of inflation expectations journalist: Your analysis tells us that the current inflationary pressures are not so great in terms of realistic supply and demand, but we should not let our vigilance be relaxed. Pan Jiancheng: Yes, it's not that inflationary pressures are not meant to be relaxed, because inflation expectations change the behaviour of buyers and sellers. If everyone is afraid of price increases, can not buy the Rob to buy, can sell but hoard up not to sell, this to a certain extent and a certain period of time will change the supply and demand situation, make the original supply and demand balance of the situation was broken. This is called "inflationary expectations into real inflation".　　So the key to preventing inflation is still managing inflation expectations. Managing inflation expectations is not entirely the same thing as preventing and managing inflation, which suggests that there is a high likelihood of imbalances or imbalances in supply and demand, and that there is a need to take measures to increase supply restraint demand to mitigate the trend of price increases, which is to prevent inflationary expectations from happening. At present, on the one hand, we should increase the supply strength, dredge the circulation channels, intensify the crackdown on speculative behavior, and ensure the stability of food and fresh food prices. On the other hand, to strengthen the psychological guidance of inflation expectations, media publicity to avoid the risk of triggering consumer panic one-sided price Information report, It emphasizes the fact that most of the products do not exist in supply shortage, and guide consumers to consume rationally. For low-income families, whose lives have been affected by higher food prices, more subsidies are needed to reduce their fear of inflation.