Three reasons lead to the rise of prices, which will not lead to hyperinflation

Introduction: affected by the high price of flour in the current market, China's national economy maintained a good momentum of development in 2003, but the GDP reduction index reflecting inflation pressure reached 4.5% in 2003, indicating that the currency situation is not optimistic The price rise of vh5 is still in the initial stage in nature, with structural characteristics, which is typically reflected in the price rise caused by the disconnection between supply and demand in some factors market imbalances The price increase mainly comes from three aspects: first, the price of grain and some agricultural products increases; second, the price of upstream products drives the price of downstream products; third, a large number of land leasing and excessive demand for real estate development lead to the price increase of land transaction and raw materials There are three reasons for the price increase of vh5 grain and agricultural products: in recent years, after the reform of grain circulation system, the price recovery has increased, the price of transportation and means of production has increased the cost of grain supply, the area of grain cultivation has decreased, and the gap of grain supply has increased The price rise of upstream products of vh5 is mainly driven by the price rise of investment products In recent years, the investment rate is too high, and the price of some investment products leads to the overall price rise of means of production After September 2003, some raw materials and energy have been restricted by bottlenecks, and the price rise is rapid Vh5 analysis of this round of price increases, we can find three deeper reasons: vh5 First, after the end of a long period of deflation, the price system has also ended a long period of low hovering A new round of economic growth cycle must be led by the renewal of equipment investment Therefore, part of the price rise is inevitable In addition, China's economic growth model has not changed, and it is still driven by investment Second, the active fiscal policy implemented since 1997 has played a great role in the control of deflation However, due to the continuous investment growth, the proportion of investment increase in GDP increase is too high, which causes structural contradictions Third, the current exchange rate system is almost the only choice for China's economic development for quite some time, and it is also the basic guarantee for China's financial security However, due to the excessive surplus, the increase of foreign exchange accounts will increase the pressure on the increase of base currency; in addition, in the increase of base currency, the increase of foreign exchange accounts will inevitably squeeze the share of domestic credit If domestic credit can not be reduced, only the total amount of currency can be increased under the condition of limited liquidity of using bills to offset foreign exchange accounts Vh5 is likely to be a short-term phenomenon It is an important basis for judging whether the price rise of vh5 will turn into hyperinflation It is also the key of macroeconomic policy-making at present There are three main reasons for vh5's basic negation of the above proposition: from the perspective of the balance between total supply and total demand, there is still room for improvement in the elasticity of total supply at present After solving some "bottlenecks" of supply, the capacity of total supply to total demand will increase There is also ample room for demand structure adjustment The price rise of upstream products caused by high investment rate can be replaced by adjusting demand structure, so as to maintain balanced development with total supply Compared with 1988 and 1993, the price rise of vh5 is essentially different This time, there are still a lot of surplus production capacity, potential production capacity has not been fully developed, and it is still in the national income cycle of not full employment While the price of some upstream products is rising, there are still many commodity prices are still in decline In terms of the solution, the price rise caused by policy factors and local hot spots can be solved by adjusting policies It is very important to use fiscal policy to counter cycle when the economy is in a low ebb, but we should reduce the fiscal deficit moderately when the economy starts For part of the demand, such as a large number of land development and leasing, the increase of long-term credit demand can be curbed by strengthening management Vh5 should see that inflation is not the main contradiction in China's economic operation at present On the one hand, CPI is rising, on the other hand, there is pressure of price decline, because the surplus labor force still makes the wage in a declining situation In the relatively severe situation of employment, the possibility of wage promoting price rise is very small Logically speaking, the price rise driven by the price rise of grain and some raw materials is likely to be a short-term phenomenon Therefore, we should pay attention to inflation prevention in the short term, but the main contradiction of long-term economic policy is to prevent deflation and solve the problem of excess production capacity Vh5 vigorously develops capital market and direct financing In September 2003, the monetary policy operation of vh5 increased the deposit reserve ratio to affect the money supply, which has a certain impact on the regulation of over reserve of commercial banks, but has a greater impact on the Treasury bond market and the money market, and enables the central bank to issue hedging bills In December 2003, the central bank issued the policy measures to reduce the excess reserve reserve interest rate and expand the loan floating range, which is actually a supplement and amendment to the policy issued in September Therefore, at present, there are several options for monetary policy operation: one is to increase interest rate Because the interest rate of the local currency is higher than that of the foreign currency, the short-term capital inflow arbitrage increases when the RMB is basically linked to the US dollar, which aggravates the pressure of the balance of payments imbalance; moreover, the interest rate in China does not have the basis to be the tool of adjusting the monetary policy In the long run, low or even negative interest rate policy is conducive to the disposal of financial non-performing assets and economic development in China, and more conducive to the development of direct financing, so the option of increasing interest rate is almost nonexistent The other is to raise the ratio of reserve requirement again Raising the deposit reserve is an effective way to tighten the excess reserve of commercial banks, but considering that two adjustments have been made last year and the reflection of the financial market, it shows that there are certain risks in using this monetary policy tool again, because its significance is not only to control the excess reserve simply, but also it is a very strong tightening signal, and it is the whole of the economy under the overall inflation This tool is not easy to use Therefore, this choice is basically negative The third is open market operation Due to the lack of policy tools, open market operation can only increase the issuance of central bank bills for operation, which is still good in terms of effect, but the cost is too high and the scale is limited From the current available monetary policy means, to achieve targeted monetary control, the key is to develop direct financing oriented monetary policy operation framework: vh5 monetary policy should pay attention to the reality of imbalance between direct financing and indirect financing, and do a good job in the docking of monetary market, capital market and insurance market At present, the proportion of domestic non-financial enterprise sector loans, treasury bonds, corporate bonds and stock financing is 85.1:10:1.0:3.9 The imbalance between direct financing and indirect financing makes the structural contradiction of money supply more prominent Only by expanding the capacity of the money market, opening the channel with the insurance market of the capital market, and promoting the development of direct financing, can we absorb temporarily too much At the same time, through structural adjustment, the demand for investment is reduced, and then the price of investment goods is reduced Vh5 -- strengthen the coordination and cooperation between monetary policy and other macroeconomic policies, and give full play to the coordination and cooperation effect of various monetary policy tools The deeper economic content behind this round of CPI rise is the credit demand amplification caused by the wrong price signal caused by the imbalance of some factor markets Therefore, monetary policy must be matched with other macroeconomic policies In this case, the macro credit rationing policy and the targeted choice of monetary policy tools to reduce liquidity may be cheaper and more effective Vh5 -- the operation of monetary policy under the current fixed exchange rate system should consider the balance of international payments and the reduction of foreign exchange accounts as the basic conditions to coordinate the domestic and foreign currency policies We should further improve the current system of settlement and sale of foreign exchange, improve the management of current account, increase the demand for foreign exchange in current account, relax the restrictions on enterprises' purchase of foreign exchange, implement the pilot reform of foreign exchange management of overseas investment, and reduce the impact of foreign exchange occupation on money supply Vh5 Vh5