2004 price rise will be fierce first and then peaceful

Introduction: today and tomorrow, the domestic soybean meal prices soared (the author is the director of the strategic planning department of the Development Department of the National Information Center, and a member of the expert committee of the National Information Center) In 2004, the field of price rise will change from partial to comprehensive, from intense to peaceful It is preliminarily predicted that the CPI will rise to about 3% in 2004 L9n every year there are many unexpected things happen Looking back at the past 2003, almost everyone had no idea that prices had skyrocketed in October and November 2003 Why is "sudden"? Will it continue to rise in 2004? The critical point of l9n and butterfly effect l9n have given many explanations to the soaring prices in October and November 2003 In general, there are the following: l9n 1, changes in the grain market From the perspective of domestic market, it is mainly due to the reduction of grain production From the perspective of international market, the main reason is that the output of grain and oil production areas has declined, which leads to the rapid rise of prices, and then transmitted to China's domestic market L9n2 In the process of China's market reform and opening up, more and more social services undertaken by the government and enterprises in the past began to enter the market, which made the service price keep rising L9n3 In terms of exchange rate, due to the continuous depreciation of the US dollar, the RMB pegged to the US dollar also depreciated accordingly, leading to a corresponding rise in the RMB price of many imported products L9n4 Theoretically, too much money will cause the price to rise Although its internal mechanism is difficult to fully understand, from the historical experience, the change of M2 in China will generally have a positive pulling effect on CPI (consumer price index) six months to one year later L9n should say that the above analysis is in place and even comprehensive But these reasons do not explain the "sudden" surge It may be an idea to analyze the critical point and butterfly effect L9n critical point l9n in October 2003, CPI exceeded 1% for the first time in recent 25 months and reached a new high in recent 6 years The main reason is the sudden rise of grain Among the 31 provinces, almost all of them are grain producing areas Anhui and Henan are the top two agricultural provinces in China, up 3.9% and 3.6% respectively In the industrial cities of Tianjin and Chongqing, consumer prices are down from the same month last year L9n although the reduction of grain production is one of the important reasons, the reduction of grain production is not the only thing in 2003 In fact, in 1999, 2000 and 2001, food production was also reduced for three consecutive years In those years, however, CPI growth was negative for half of the time Because of this, many people don't understand the rapid rise of CPI caused by the reduction of food production in 2003 L9n the secret is very simple: the change of anything is a process from quantity to quality It is because of the accumulation of the previous years that the grain production in 2003 was reduced again that the qualitative change of the price trend was finally triggered From the perspective of prediction, it is the most difficult to predict the critical point from quantitative change to qualitative change This is also the reason why the rapid price rise in October 2003 made people feel sudden L9n butterfly effect l9n if the CPI rose by 1.8% in October 2003, it is surprising that the CPI rose by 3.0% in November The main driver of the price rise in November remains food and food Among them, the increase in food prices rose further to 10.8% from 3.2% in October, and food prices rose further to 8.1% from 5.1% in October Compared with October, the real supply-demand relationship of l9n market in November is relatively stable, and the difference will not be too large In addition, last year's base numbers were basically the same But in this case, the price level is so different One explanation is the so-called "Butterfly Effect" L9n for many years, enterprises and residents do not think much about the inventory problem in purchasing grain and oil, but they start to increase their purchasing efforts under the stimulation of rising prices On the contrary, what farmers used to worry about all day long was how to sell food Now, under the temptation of expecting the price of food to continue to rise, many people are hoarding it instead In this way, the gap between supply and demand is artificially widened, and food prices are further raised L9n price trend in 2004 how will prices go in 2004? My three judgments are as follows: l9n 1 The overall price will continue to rise l9n There are three reasons: first, since the price of grain has been the main driving force for the rise of prices since October 2003, it will be a long time before farmers respond to this signal, increase grain output, and then the new grain goes on the market; second, the price in 2004 will have a tail raising effect, even if the price in December 2003 remains unchanged, due to the low year-on-year base, the price in the first three quarters of 2003 Third, from the current trend, the world's economy will rise in 2004 and grow faster, which will also lead to rising prices L9n 2 Inflation will not occur L9n will not rise too fast in 2004 due to various factors L9n first, in recent years, the proportion of food consumption spent by urban and rural residents in China has basically dropped at a rate of more than 1 percentage point every year This shows that the impact of food on prices is becoming smaller and smaller L9n second, many of our products are in a situation of oversupply According to the latest survey of the Ministry of Commerce, 78.8% of the 600 major industrial products in the second half of 2003 are still in a state of oversupply L9n third, the current increase in food prices is actually within the scope of government permission According to the estimation, in 2003, there were about 50 million tons of short grain in China, but there were 150 million tons of grain reserves, only one third of which could be used to stabilize the price of grain L9n fourth, the government has increased the protection of arable land and promoted food production by directly granting food subsidies to farmers, which will help to promote the growth of food production in 2004 L9n fifthly, from the perspective of monetary policy, the central bank has significantly increased monetary tightening since August 2003, which will have a certain inhibitory effect on prices in the second half of 2004 L9n sixth, historically, serious inflation occurred in China in 1988 and 1993, but the main cause is the price marketization reform But now the price marketization reform has been basically completed, and it will no longer play a major role in promoting the price rise L9n3 The characteristics of price operation will be changed from partial and sharp increase to comprehensive and small increase L9n at present, a very obvious feature of price operation in China is that the prices of a few commodities are rising rapidly, and most of them are still fixed In addition to the price of services, the main increase was in upstream products, such as food and energy Relevant calculations show that after excluding food prices, CPI in November 2003 increased by only 0.6% year-on-year If the impact of energy prices is excluded, the consumer price index is actually declining from 2003 to now L9n estimates that the above characteristics will be maintained or even strengthened in a short time before 2004 For example, with the approval of the national development and Reform Commission, Shanghai's electricity charges have been adjusted structurally Except for the price of electricity for residents and agricultural production, which is not adjusted, the price of electricity for other types of users is generally increased by 2.5% to 5% I believe that with the example of Shanghai, other regions with tight power supply will follow up, and the national average price level will rise significantly L9n then, the price operation will gradually shift to the second stage, that is, from a partial and sharp increase to a comprehensive and small increase There are three reasons: l9n one is that the current price increases are all upstream products Affected by this, the cost of downstream products will increase accordingly, and the enterprise has the internal impulse to increase the ex factory price of products L9n second, some industries may work together to formulate agreements such as price alliance to promote price rise Recently, it has been reported that the prices of the main raw materials for color TV production have risen substantially, which makes the five major color TV giants in China raise the prices of color TV sets in 2004 Color TV market is one of the most competitive markets Its price change is the vane of the price change of the general consumer goods If the price of color TV rises in 2004, it means the beginning of the overall rise of price level L9n third, due to the overcapacity of downstream products and fierce market competition, most downstream enterprises can only increase the cost by strengthening management, doing large-scale, developing new products, reducing consumption and other measures, and the price of products will not rise much According to l9n's overall judgment, 2004 will be a year of moderate price growth The field of price rise will change from partial to comprehensive, from intense to peaceful It is preliminarily predicted that CPI will rise to about 3% in 2004 L9n