Analysis of China s price control measures in 2010

1.Monetary policy instruments.

The central bank regulates the supply and demand of money and stabilizes prices**.

2.Exchange rate policy instruments.

The expectation of RMB appreciation is an important reason for the inflow of international hot money, as long as there is room for RMB appreciation, hot money will continue to flow into the country, the inflow of these hot money, on the one hand, brings more investment available funds, on the other hand, it also increases the possibility of investment, bringing greater uncertainty. At the moment, it is necessary to change China's exchange rate system, and relevant scholars have proposed that China's renminbi exchange rate should speed up the pace of appreciation on the premise of steady rise. Increase flexibility in exchange rates.

3.Fiscal policy instruments.

Regulate demand, change supply.

Adopt contractionary monetary policy instruments.

1.Strengthen and improve macroeconomic regulation and control 2Intensify support for agricultural production 3

Efforts to protect the market** 4Stable pricing and guide price 5Initiation of a temporary ** intervention 6

Strengthen administrative law enforcement 7Properly arrange the lives of low-income groups.

1. Subsidies for energy-saving and environmentally friendly household appliances.

2 Western Village, Village Access, Road Administration.

3 Subway construction.

4. Rural water conservancy construction.

5 Private banks.

6. Private participation in railways.

7. Private capital participates in municipal administration.

8. Accelerate approval of large projects.

There are three main reasons for the current price of goods**.

Abundant liquidity is an important reason for prices**. Since 2009, the growth rate of M2 has been above 17%, and the growth rate of M2 has remained above 25% from March 2009 to February 2010. At the end of October 2010, M1 and M2 grew by and, respectively, higher than the average level and percentage points of the same period from 2000 to 2008.

From the perspective of the relationship between money and the economy, since the end of 2008, the growth rate of M2 has been 13 percentage points higher than the sum of economic growth and CPI, which is nearly 10 percentage points higher than the average level since the current economic cycle. The goal of China's monetary policy is to maintain the stability of the value of the currency and thereby promote economic growth. In my opinion, the stability of the currency value should be measured not only by prices, which is short-term, but also by the ratio of the amount of money in circulation to the volume of goods and services, which is long-term and fundamental.

The current market speculation on multiple assets and commodities is also a factor of abundant liquidity.

Inflation expectations have pushed up the price level. In recent months, prices have been relatively fast, the phenomenon of hoarding and reluctance to sell agricultural products in the market has been obvious, and residents' inflation expectations are strong. According to the People's Bank of China Business Sentiment Survey data, the future price expectation index of residents rose to the third quarter, an increase of one percentage point from the previous quarter.

Against this backdrop***** it is rising rapidly. The Shanghai ** Exchange **** rose rapidly from the yuan at the end of July to the yuan on November 11, **18%. The circulating market value of the Shanghai Stock Exchange rose from one trillion yuan on July 5 to one trillion yuan on November 8, **78%.

The minimum wage has been raised in various places. In the first three quarters, the average labor remuneration of employees in urban units in China increased by 14% year-on-year, which was higher than that of the first half of the year and the whole year of the previous year, respectively, and the labor cost was obvious. Fears of a wage-spiral have also pushed inflation expectations higher.

Agencies' expectations for prices have risen sharply. Wind data shows that the average CPI** value for November has exceeded the October level, and the average CPI** value for 2011 is and may also exceed the price level for the whole of this year.

Commodities have brought imported inflationary pressures. In October, the international commodity CRB spot ** index continued to rise on the basis of exceeding the record high level in September, reaching a year-on-year **. It began to fall back in mid-November, but it is still above the pre-crisis high.

International oil prices rose slowly, and at the end of October, Brent **** rose to a barrel of dollars. From the perspective of historical laws, the purchase of domestic raw materials is highly consistent with the changes in international bulk commodities. The current abundance of global liquidity is likely to keep international commodities** high for some time to come and continue to weigh on domestic prices.

According to the theory of neo-Keynesianism, there are three main reasons for the price of goods in 2010

Demand pulls on. From the perspective of aggregate demand, the cause of prices is that the aggregate demand is excessively increased, the aggregate supply is insufficient, or the demand for goods and services exceeds the supply available according to the current **, and therefore the general price level**. Aggregate demand includes consumption demand, investment demand, ** expenditure, and net exports.

Supply-driven. Analyze the causes of prices** from the perspective of aggregate supply. Supply is production, and according to the production function, production depends on cost. Therefore, from the perspective of aggregate supply, the cause of prices** is the increase in costs.

The increase in costs means that the same level of output can be reached only when it is higher than the previous level, that is, the aggregate supply curve moves to the upper left and reduces the national income, and the level rises, and this increase is the cost-driven price.

Driven by a mix of supply and demand.

Combine aggregate demand with aggregate supply to analyze the causes of prices**. The root cause of prices** is not a single aggregate demand or aggregate supply, but the result of a combination of both. If the price ** is started by the demand pull, that is, the existence of excessive demand causes the price to rise, this price increase will cause the wage to increase, and thus the increase in the cost of supply will cause the cost to push the price**.

If the price ** is started by the cost push, that is, the increase in cost causes the price to rise, then if there is no corresponding increase in aggregate demand, the rise in wages will eventually reduce production and increase unemployment, so that the price ** caused by the cost push will stop. This price will only persist if there is an increase in aggregate demand at the same time as the cost push.

I can say with certainty that it is definitely not a construction worker, a farmer, a farmer. It is polarization, monopoly, and the decline of the national industry! Polarization has led to an increase in the gap between the rich and the poor, and most of the social wealth and resources are concentrated in the hands of a very small number of people, who are very greedy for wealth, and they use the resources in their hands to monopolize some social resources, desperately raising prices, in order to make huge profits, such as real estate, garlic, ginger...

Of course, there will be a lot of this kind of stuff in the future, if you can't stop them. Monopoly is a terrible thing, in fact, what is more harmful than the money of the rich is power, absolute power. The state and ** hope to balance the society through some hand-making, but in the eyes of individual people and localities**, there are only huge profits!

But in addition to land, we have a lot of public resources. The national industry should be our foundation, we cannot pin our hopes on any imperialist enterprise, history proves that this is delusional! Our steel refining industry, petrochemical industry, and electronic information industry, what can stand alone?

We know in our own hearts what kind of steel we can make; We also know in our hearts what kind of oil and some important chemical products we can refine; We know better what kind of core and what kind of system we use. We just don't know when we're going to have our core industries. In international competition, it is not enough for us to rely on a harmonious heart, we must have our own national industry.

But now the development of our national industry is quite slow, a large number of private capital is not keen on the revitalization of the national industry, for them the investment risk of these industries is far greater than the return, from the position of businessmen this is absolutely reasonable, but our relevant departments in the singing of the song can not open a door for our national industry? Therefore, in view of excessively high housing prices and excessively high prices, we cannot only carry out simple individual targeted suppression, but the key is to treat the symptoms and cure the root cause, so as to achieve real long-term peace and stability. In addition, I would like to give a special reminder to the wealthy businessmen:

Personal honor and disgrace, wealth and poverty are inseparable from the strength and prosperity of the country and the rejuvenation of the nation. Nowadays, many people are only obsessed with the expansion of their own wealth, taxes can not be paid, and the life and death of the common people can be ignored, and they seem to have nothing to do with the survival of the country and the life and death of the nation. It's just that we should have a good understanding of our recent history, and without a country, there can be no individual.

Excessive currency issuance is a common problem in all countries in the world, and after the recent implementation of quantitative easing monetary policy in the United States, most commodities in the international market have risen sharply, especially oil, cotton, and sugar. In the case of overflowing liquidity, the factor of hot money speculation cannot be ignored. In the first half of this year, mung beans, garlic, cotton, etc. have appeared ****, and cotton has risen to 10,000 yuan per ton, which is the speculation of funds in it.

On November 8, the Zhengzhou Stock Exchange traded more than 30 billion yuan in cotton ** a day, which greatly exceeded the normal range, and the turnover rate was very high. ”

The reason is that there is too much money printed, and the money in our hands depreciates too quickly.

Less currency is issued, and the renminbi appreciates.

Inflation refers to the phenomenon of sustained and widespread price depreciation for a period of time caused by the continuous and widespread price of paper money under the condition of paper money circulation. An important indicator of inflation measurement is the consumer price index, which has now been reached, and there is a clear inflation manifestation, and the reasons for this are many, mainly the following four main reasons:

1.Excessive currency issuance is key.

2.Cost push (rising labor costs, imported raw materials****) 3Structural factors (natural disasters cause some agricultural products to be insufficient) 4Demand-pull (hot money coming in increases demand).

The M2 growth rate is too fast and the surplus is too large.

The appreciation of the renminbi has led to a large amount of foreign capital flowing into the country, which has caused inflation.

Wow, what a big topic!! You can write a big **! There are many reasons for the hot money mentioned upstairs, the increase in China's monetary liquidity, that is, there are too many paper money in the market, and the rise of many raw materials will also lead to the rise of related products

Well, in the short term, it's the skyrocketing prices due to the country issuing too much currency, which is the basic reason. No matter what the situation is, the price rise must be caused by the relationship between supply and demand, and the price rise is a time when supply exceeds demand, and the supply is not only the result of real productivity, but also the result of some people's deliberate speculation. From a distance, it is also related to the US financial crisis.

The U.S. financial crisis affected China's exports and employment, and the country had to issue too much currency to stabilize the situation in order to stabilize the market and appease the people.

So far, this year, the state has taken the following actions to deal with inflation, i.e., prices**.

On the evening of October 19, the People's Bank of China announced on October 19 that it had decided to take effect from October 20, 2010.

Adjust the benchmark interest rate of RMB deposits and loans of financial institutions. The benchmark interest rate for one-year deposits of financial institutions has been raised.

percentage points, increased from the current to ; The benchmark interest rate for one-year loans was raised by a percentage point.

point, from the current one to the other; The benchmark interest rates for deposits and loans of other grades will be adjusted accordingly.

This is also the first time in three years that the country has raised interest rates.

On November 10, 2010, the People's Bank of China raised the number of depository financial institutions from November 16, 2010.

The reserve requirement ratio (RRR) of RMB (referred to as the deposit reserve ratio) is one percentage point.

I believe that the central bank's action is for November 11, and the Bureau of Statistics announced that the CPI in October has seriously exceeded the country's target of about 3% inflation control this year.

And take into account the action on inflationary pressures, and at the same time send a signal to the market if there are future inflationary pressures.

If it is not reduced, the possibility of raising interest rates or raising the reserve requirement ratio cannot be ruled out.

There should be a series of price control measures implemented first, just like housing prices will rise for a period of time, and it is impossible to drop it all at once.