Media say next year's regulatory measures will focus on asset prices

Wang Shifeng prices and inflation expectations have become the hottest economic term for the end of the year, but the impact on inflation and inflation expectations is not exactly the same in each part of the economy. The Government's experience with rising CPI prices, public utility prices, rising prices for industrial raw materials and asset prices has become a hot spot for recent inflationary expectations.　　The rise in food prices is the key factor in the impact of CPI as a measure of inflation levels. In China's CPI weight, food accounted for about 34% of the proportion of food in the price changes in the larger proportion of meat products to the CPI 8%~9%.　　As food from raw materials to finished products between the production chain is relatively short, so the heavier weight and conduction faster so that food prices on the CPI formed a hostage role. Current food prices are more of a cyclical correction than a rise. If carefully observed, in the first half of this year, the price of meat and eggs has reached a cyclical trough.　　The cyclical explanation of current price increases also determines that food prices and CPI will be in a fast-rising channel next year.　　The Chinese government has a wealth of coping experience with the rise in food prices, with multiple tools such as food reserves, price controls and subsidies for low-income groups, which should be able to minimise the impact of rising prices on residents. In addition to food, the price of service products in the CPI actually accounted for one-third of the proportion. Service prices are largely constrained by labor costs, transportation, medical and telecommunications prices.　　As employment pressure rises in the aftermath of the crisis, labor costs will not rise rapidly, and service offerings will not be significant for the CPI's rise next year. As for the price of utility products, the price of water, electricity and gas in the CPI is about 6% of the weight in CPI.　　Although the weight is not big, also has been in the government regulation, but belongs to the most affects the ordinary resident nerve price change one factor. At present, some places have already launched a hearing on water price adjustment, according to reporters, all over the next year may be in the first quarter of the residential electricity price adjustment to be heard, and the actual implementation or continuation of the price adjustment to two quarter; While the price adjustment for utility products is concentrated next year, the impact on CPI will be offset by a smaller weight.　　The government in the actual price adjustment process more need to drive the public to digest prices expectations.　　At present, China's annual economic growth rate of about 8% per cent has a strong bearing on CPI, and limited inflation will have a positive effect on stimulating economic development and driving enterprise production.　　Excess capacity suppresses PPI growth in addition to headline inflation as measured by CPI, inflation in the production sector, measured by PPI next year, will continue to slow in the game of rising raw materials and two of overcapacity. At the end of the year, Baosteel's January 2010 price policy took the lead in a campaign to raise prices in the industrial sector, not only because of the fiery sales of downstream car products, but also because of the large steelThis year, many rounds of inventory adjustment can be "light".　　But the overall steel production capacity in the country is huge, and the average daily steel production in November remains as high as 49.33 million tonnes, so the volatility adjustment is likely to remain the future price trend of the industry. Other raw materials industry is the same, upstream prices on the downstream product conductivity has been restricted.　　However, the 2009 PPI has been in deep decline, the low base period will lead to a gradual rebound in 2010 PPI, and the dollar depreciation of imported inflation may lead to faster raw material prices.　　Looking back over the past three years, even though crude oil has risen to $140 a barrel, copper rose to 8800 dollars per ton, iron ore prices nearly one-fold growth, downstream of plastic products, mechanical and electrical products, cables, cars are not significantly higher or even in the down channel, overcapacity problem has become the world's most important factor in the price of industrial products. The most dangerous is the rise in asset prices, which is difficult to show in the CPI inflation, but also the most impact on the residents ' inflation expectations, and thus affect the residents ' consumption and saving behavior. Official data show that November 70 large and medium-sized cities in the country housing sales prices rose 5.7% year-on-year, high prices have been to other consumption to form an extrusion effect. There are signs that major regulatory inflation expectations in the coming year may revolve around the effective adjustment of asset prices.