Price growth hit its highest since 1997 in January. China may raise interest rates this year

Introduction: as the consumer price index (CPI) increased by 3.2% in January, which is the highest since 1997, whether China's economy has overheated and needs to raise interest rates has become the focus of attention Some experts and scholars believe that China may raise interest rates this year to cope with rising consumer prices and investment growth, while others say that China does not need moving interest rates at present According to China Daily, yuan Gangming, chief economist of the Chinese Academy of Social Sciences and other three economists agree that if consumer price index and investment continue to grow rapidly in the coming months, the central bank is likely to raise interest rates for the first time in eight years According to yuan Gangming of Abu, rising prices may affect consumption habits, and people will try to save as much as possible However, the one-year deposit rate is 1.98% "Because interest rates are low, people save money and lose money," he said Wang Zhao, a researcher at the development research center of the State Council of Abu, said, "there are signs of inflation at present." even if the focus of the government's fiscal policy changes from economic growth to stable growth, it will increase the possibility of inflation Qiu Zhaoxiang, a professor at Beijing University of foreign trade and economic cooperation, said the government needs to adjust its interest rate policy to cope with possible economic overheating and inflation "With fixed asset investment growing by 26.7%, China's economy grew by 9.1% last year Industries such as real estate, steel and cement are overheating " Tao Dong, an economist at UBS, also warned that there were clear signs of inflation in China However, Li Yang, a member of the monetary policy committee, believes that the current price rise is a structural one, whether it can be sustained remains a question, whether it will lead to greater uncertainty about inflation, and if deflation policy is adopted, it may lead to inflation In his view, interest rates can be fixed, but structural adjustments should be made Xu Hongyuan previously also said that prices are likely to fall in the second half of this year If the interest rate does not move in the first half of this year, it is less likely to move in the second half While the Central Bank of Abu is debating whether to raise interest rates or not, the central bank is quietly starting to act Since last year, the government has taken a series of measures to control the money supply Last year, the central bank began to control the money supply increased to ensure rapid economic growth and fight against deflation since the 1997-1998 Asian financial crisis The Abu central bank also issued a regulation last year to strictly control new loans to the fast-growing real estate industry However, commercial banks continue to expand lending in order to pursue greater market share The central bank also asked construction companies to stop letting developers use their engineering loans At the same time, the central bank increased the legal reserve ratio of commercial banks Zhou Xiaochuan, governor of the Central Bank of Abu, said last week that the government will pay close attention to the fluctuation of inflation this year, "the central bank will use various tools to regulate credit growth." The measures taken by the Abu to control the money supply appear to have worked The money supply has declined in the past five months to January Earlier figures showed that the broad money supply m2 in January increased by 18.1% year-on-year, and the growth rate fell by 1.2% year-on-year (Wu Tan) Abu