Food is not the main contradiction.
In July, the growth rate of CPI rose strongly to 5.6%, setting a new high of 10 since 1997. Guifang Wen, a researcher and doctoral supervisor at the Institute of Finance and Trade of China Academy of Social Sciences, believes that the main reason for the increase in CPI in the first half of the year is the increase in the prices of food such as grain and pork.
"Because the increase in food prices is closely related to the increase in the prices of means of production, the increase in the prices of international agricultural products, the acceleration of urbanization, the reduction of cultivated land and the rapid growth of industrial grain. With the rising prices of oil and other fuels and electricity, as well as the increase of labor costs, the cost of agricultural production has greatly increased, and it is difficult to control the administrative price limit of agricultural materials only by the state. In addition, due to the lack of interest in pig prices last year, farmers slaughtered a large number of sows, and the impact of' blue ear disease', the supply of pigs was seriously short this year, and prices rose sharply. "
According to statistics, in the past five years, the prices of urea, diesel oil and plastic film have increased by 26.6%, 64.4% and 60% respectively, and the cost of grain production has increased by 23.9% per mu.
Yi Xianrong thinks: "The price increase of agricultural products is inevitable, which is the only way for us to solve the' three rural issues' and the process of urbanization. Food prices are too low, and it is high time to raise prices. In the past, the government controlled food prices through the scissors difference between agricultural products and industrial products, and later restricted the mobility of farmers by dividing the agricultural population and the urban population. With the development of urbanization and urban industrial and commercial economy, more farmers go to cities to work, and fewer people produce food, which affects the supply of food. However, compared with the prices of other products, food prices are still rising slowly and lagging behind. "
According to statistics, at present, the average purchase price of three kinds of grain in China is 0.79 yuan per catty, only 6 cents higher than the 0.73 yuan in 1995. The price of wheat is still lower than 1996, and the price of soybean is lower than that in 2004. The price of pork is only about 30% higher than that of 1997.
Guifang Wen believes that the rising trend of food prices will continue for some time. If the government wants to solve the food price problem, the key is to solve the problem of farmers' treatment, so that farmers can get real income from the price increase. "In general, the increase in the purchase price of grain should be able to make some compensation for production costs and increase income. However, the increase in farmers' income this year is not entirely due to the rise in food prices, but to the increase in the wages of migrant workers who work in cities. If farmers' income is not guaranteed, they will eventually be reluctant to grow all kinds of food. In fact, the planting area of grain has decreased this year. "
In addition, Tao Dong, managing director of Credit Suisse and Asia's chief economic analyst, predicted that as of July 29th, nearly a quarter of 1 1 billion farmland producing autumn grain will be hit by drought or flood. Although this year's summer grain output increased by 1.9% compared with the previous year, if the autumn grain, which accounts for four-fifths of the annual output, fails, the annual grain output will still be lower than the high level of 497.7 billion kilograms in 2006.
Asset price bubble
Grain is a basic product, and its rise will inevitably drive up the prices of food and services. Yi Xianrong said that in the past, a bowl of shredded pork noodles with pickles was ordered at Shenzhen airport, and each bowl of 32 yuan rose to 40 yuan in the last month or two.
However, in the face of the recent debate on whether China is facing inflation, Cao Changqing, director of the Price Department of the National Development and Reform Commission, recently said that the current price increase is mainly structural and there is no inflation.
Guifang Wen also believes that according to the existing CPI statistics, the contribution rate of food prices to the overall level of consumer prices is 80%. If the food factor is deducted, other CPI items will increase by 0.7%. The current price increase is structural, and inflation has not formed in China.
Regarding the problem of excess liquidity that people are concerned about, Guifang Wen thinks: "Excess liquidity is an important reason for overheated investment, but a lot of funds have not flowed into the commodity market, but into the capital market. The wealth effect of the property market and the stock market prompted residents' savings deposits to move. ".Therefore, excess liquidity mainly affects asset prices and has little impact on the whole commodity market. "
The financial operation data released by the central bank in April showed that RMB deposits of households decreased by 654.38+0674 billion. According to the insiders, it was in the first half of the year that the new retail capital was 654.38+06 billion, which pushed the market from 3,000 points to 4,000 points.
Li Huiyong, senior macroeconomic analyst of Shen Yin Wanguo, does not deny that the capital market absorbs liquidity, but he told reporters: "The rise in asset prices will be transmitted to consumer prices through various channels. At the end of 2006, the proportion of M2 residents' savings decreased by 0.9 percentage points compared with 2005, while the proportion of M2 m 1 increased by 0.2 percentage points, and this trend was more obvious in 2007. As the growth rate of household savings slows down, the growth rate of M 1 accelerates, indicating that more and more quasi-currencies are beginning to enter the circulation field, which indicates that the potential purchasing power is changing to the real purchasing power. In fact, it is this change in the currency field that has led to the inflation rate of 1993 and 1994 exceeding 20%. At present, this change has reappeared, indicating that the risk of inflation has increased significantly. "
Yi Xianrong thinks: "Part of the reason for the price increase is the influx of funds into overheated areas such as real estate. The way of price transmission is very simple. The rapid rise in house prices will definitely be reflected in the rent. Last year's rent was 1 100 yuan. Now the landlord may rise to 1400 yuan, and the price of related services will also rise. Secondly, the real estate market is related to dozens of industries, which will definitely drive the wage level of all links to rise. When wages generally rise, purchasing power will increase and demand will be strong. The increase in wages is also cost-driven, which will be transmitted to products in downstream industries. "
"Another factor for the price increase is the' wealth effect' brought by the China stock market, which makes many investors have a lot of book wealth and promotes their consumer demand."
As an insider said, the asset appreciation game is still going on, and the wealth effect has been reflected in the rapid growth of residents' consumption such as catering, entertainment and domestic and foreign tourism. Recently? Goldman Sachs Gao Hua pointed out in a research report? "The wealth effect brought by this bull market may have a more significant positive impact on China's consumer demand in the next 1-2 years."
According to the statistics of American economists of Goldman Sachs, from 1995 to the end of 1998, the rise of stock prices had a positive impact on the overall consumption level of the United States119 billion US dollars, which promoted the consumption growth by 2.3 percentage points and directly contributed to the real GDP growth by 0.5 percentage points. Japan's economic research team's estimation of Japan's wealth effect shows that the impact of stock market wealth changes on household consumption is similar to that of the United States.
Gao Hua, a Goldman Sachs, believes: "In the continuous stock market rally from the end of 2005 to the end of April this year, the increase in market value alone brought 4.5 trillion RMB of stock market wealth, of which 3. 1 trillion RMB was directly held by retail investors. Among the increased wealth, it is estimated that 3 1 100-47 billion yuan may flow to the consumption field, which may boost residents' consumption by 0.4-0.6 percentage points. Although China's retail sales, especially the actual retail sales data, have not seen extraordinary growth, the first impact of the wealth effect may have initially appeared in various markets in China (such as real estate, luxury goods, antiques and art). "
Huatai Securities Research also reported: "The year-on-year increase in credit in the first half of this year is mainly due to the year-on-year increase in household loans, which indicates that consumer credit tends to be active, which is related to the wealth effect of the stock market rise on consumption in the first half of this year."
Therefore, Zuo, chief analyst of Galaxy Securities, pointed out: "Especially in the recent situation of' excess liquidity', we have to carefully analyze the reasons behind the recent CPI increase."
The more serious problem is that if we further analyze the changes in wealth redistribution, we will find that the gap between the rich and the poor is also widening. Yi Xianrong said: "This kind of inflation in China is actually an inflation of robbing the poor to help the rich. Low-and middle-income people cannot enter the capital market, or occupy a very small proportion, and inflation makes their currencies depreciate more and more. The existing wealth of the whole society is quickly transferred to a few people through the asset price bubble. "
"Data of the Agricultural Age"
In Yi Xianrong's view, inflation began a few years ago. Why does the CPI data still look so low now? The key point is that the statistical data of CPI does not fully consider the housing price with the first consumption weight of urban residents in China.
According to the statistics department's explanation, the international practice is that residents buy houses as investment, so China's housing prices cannot be included in the consumer price index. People from all walks of life have questioned this for a long time. Wan Xiaoxi, manager of Southern Cash Increase Fund, once pointed out that China urban consumer price index was undervalued 10 times in 27 years. At the beginning of his research report, he skillfully quoted Cui Jian's "It's not that I don't understand": "I can't remember the past time/I don't know that there were many strange things in the world in the past/I used to think that simple things are completely incomprehensible now." He thinks the taste of the two is similar.
Yi Xianrong said that he did not understand why real estate was consumption when domestic demand needed to be stimulated; When calculating CPI, real estate becomes an investment.
"The real estate market in Europe and America has developed for hundreds of years, and the proportion of the first-hand housing market is very low, only 15%-20%. The real estate situation in China is just the opposite, with more than 85% of the first-hand housing market and less than 15% of the second-hand housing market. In addition, real estate investment speculation has prevailed in recent years, but how many people in China invest in buying houses, and most of them live in their own homes. China's real estate market is different from other countries. Covering up China with so-called international practices can easily cover up the fact of inflation. "
Guifang Wen said with a smile, maybe the statistical department should adopt two sets of statistical methods according to international practices and changes in the actual consumption patterns of China residents. In this way, whether the price level is high or not will be clear at a glance.
Yi Xianrong further pointed out that even according to the existing CPI statistical system, the rent calculated by the National Bureau of Statistics is ridiculously low. "according to the regulations of the national bureau of statistics, personal housing consumption refers to the fact that when the housing is used for residents' residence, the rental is included in the lessee's consumption expenditure, and the owner-occupation is compared with the corresponding market? The rent price is included in the final consumption of the house owner in the form of virtual rent. In 2006, the residential consumption of urban residents in China was only 909 yuan, which was less than that of 80 yuan on average. The rural house near the North Fifth Ring Road in Beijing is about 10 square meter. Rent 200 yuan on a monthly basis, which is 150 yuan at a distance, not counting utilities. "In terms of housing category, the weight of housing category in the CPI system of the United States is more than 42%, while that in China is only 13%. Some people call the lagging CPI "the data of farming age".
Yi Xianrong thinks: "The basic statistical standard of CPI was formulated more than 20 years ago. At that time, medical care, education, housing and old-age care were mainly borne by the state, and the weight of food was understandable. However, with the development of various reforms, the original burden borne by the state is mainly borne by individual residents, but the adjustment of CPI weight is very small, which seriously lags behind real life. If we really reflect the consumption behavior and consumption patterns of residents according to the actual situation, will CPI still be 5.6%? An economist in Canada calculated the weights according to the index system in Canada and the official data published by China. China's CPI is 6.8%. "
Guifang Wen also thinks: "Now the media is a little misleading, and they all point the finger at agricultural products. Food prices have indeed increased household expenses, but this cannot hide the problems of medical care, education and housing. How much burden does the' three big mountains' add to residents in a year, and how much burden does the increase in food prices add to residents in a year? " He also believes that CPI statistics should be classified into categories, industries and regions. According to the concept of stratification, the Census and Statistics Department of the Hong Kong SAR Government has compiled four categories of consumer price indices, namely, A, B, C and Comprehensive, to reflect the impact of inflation or contraction of local price levels on different strata.
The central bank also pointed out in the monetary policy report in the fourth quarter of 2005 that "due to the limitations of price control and price statistics methods, China's CPI can not fully reflect the real inflation level."
Wei Guixiang, director of the Urban Social and Economic Investigation Department of the National Bureau of Statistics, explained: "The increase in living pressure is largely caused by reasons other than the price index. Tens of thousands and hundreds of thousands of yuan of' school selection fees', as well as various piano classes, ballet classes, Orsay classes and oral English classes, will definitely bring great expenditure pressure to ordinary families. However, these items are abnormal and illegal, and prices cannot be obtained through normal price acquisition channels, so they are not homogeneous and comparable, so they cannot be included in the calculation of price index.
In terms of medical care, the current price index reflects that the price of medicines is falling, especially western medicines, because the government has been lowering the price of medicines. However, if the types of drugs are increased, the grades of drugs are improved, or large prescriptions are made and imported facilities are used for diagnosis and treatment, especially some drugs with reduced prices disappear from doctors' prescriptions, and other factors will bring huge and rising medical expenses to patients. These are all problems outside the price index statistics, which are invisible in the price statistics. "
An observer pointed out: "The premise of this statistical thinking is to assume that society is an ideal model and everyone acts according to laws and regulations. Such CPI actually does not reflect the actual consumption expenditure of residents, and it is more like a work of art simulated in a vacuum laboratory. "
Raising interest rates is the only way?
Experts pointed out that if the distorted CPI is used as the frame of reference for monetary and fiscal policies, it may mislead the central government's decision-making.
Guifang Wen said: "We should attach great importance to the current food price problem, but we should not take it as the focus of solving the problem. What we really need to pay attention to is the problem of' three big mountains'. The price increase of grain and pork is very beneficial to increase farmers' income and encourage farmers to increase production. There is no need to use administrative means to curb prices. At present, the masses can't stand the price increase, mainly because the price of resources in China has been at a low level for a long time and they are used to eating cheap things. "
In addition to the daily life of ordinary people, the prices of pork, edible oil and other commodities are also rising, and almost all consumer goods such as coal, electricity, steam and water are rising. Professor Wen said: "The prices of coal, electricity and steam are all rising, which really gives people a bad feeling that prices are rising in an all-round way." But we can't talk about price on the basis of price, and we should pay more attention to some factors other than price, especially the voice of price increase in industries and enterprises with high profits. Can't the company raise the price just because the cost is high? The government should first analyze this problem, clarify the relationship between price and cost, price and profit, price and market, and find out whether it is necessary to raise prices. Otherwise, this year's CPI will probably bear the weight of some interest groups and be forced to continue to push up. "
Zhang Yang of orient securities said: "The increase in CPI in the first quarter of this year came from the changes in food prices at the beginning of the year, and the motivation for further price increases was insufficient. The purpose of raising interest rates does not come from concerns about inflation. It is worth noting that the prices of assets such as real estate and stocks have changed significantly. The low interest rate environment and excess liquidity are indeed important reasons for asset price inflation. "
"The apparent appreciation of the renminbi is actually a depreciation. The environment of high growth and low interest rate has caused excessive bank credit and excessive currency issuance. Bank loans will have a monetary multiplier effect. If 3 trillion yuan is issued and the multiplier is 5, it means releasing 15 trillion yuan. In addition, there are institutional reasons such as foreign exchange reserves and some government policies, which have led to a rapid rise in asset prices. " Yi Xianrong analyzed.
Li Huiyong also said: "The money supply far exceeds the real economy's demand for money, which has accumulated great inflationary pressure on China's economy. In terms of growth rate, in 2006, the GDP ratio 1997 increased by 1.4 times, and M2 increased by 3.4 times, and the growth rate of M2 was more than twice that of GDP. In 2006, the ratio of m2/GDP was 1.60%, which was 40 percentage points higher than that of 1.997 and much higher than that of other countries. Because it is difficult to fundamentally change China's current foreign exchange settlement and sale system, the annual foreign exchange reserves will still be converted into the base currency, which will further increase the degree of currency surplus. "
Teng Tai, director and chief economist of the Research Center of china galaxy Securities Co., Ltd., is concerned about the international background of rising asset prices and inflation.
"The background of global excess liquidity is that the United States has overspent US dollars characterized by huge trade deficit and external liabilities, and Japan has exported surplus credit currency characterized by low-interest lending currency. The flood of dollars and the export of yen are the main reasons for the global currency surplus. Faced with the irreversible phenomenon of global currency excess liquidity, China's RMB exchange rate has continuously changed the excess liquidity of the US dollar and the Japanese yen into the excess liquidity of the RMB due to the lack of sufficient flexibility. "
In the first quarter of this year, China's foreign exchange reserves increased by US$ 654.38+0357 billion, and the Central Bank of China invested more than RMB 6,543.8+0 trillion in commercial banks to purchase these foreign exchange reserves (commercial banks converted them into RMB demand deposits of enterprises and individuals in commercial banks by purchasing foreign exchange of enterprises and individuals). Teng Tai predicts that the China People's Bank will force the purchase of more foreign currencies in 2007, which may reach 3 trillion yuan, which will lead to the rapid growth of M 1. "
Li Huiyong said: "Because the current inflation in China is caused by many reasons, such as excessive money supply, rapidly increasing demand, rapidly rising costs and the impact of international prices, it is difficult to achieve the purpose of preventing and fighting inflation by relying on a single policy tool. We expect the government's anti-inflation policies and measures to at least include raising interest rates, appreciating, raising the statutory deposit reserve ratio, and diverting excessive liquidity. "
Yi Xianrong said: "Inflation has started in China, and the central government will never take it lightly, but will adopt effective monetary policy to resolve its risks. China has no corresponding legal system, private ownership of land and Japanese credit system. Once the asset price bubble leads to hyperinflation, it will destroy China's economy, even more serious than the Japanese 1988 economic crisis. "
He believes that the basic way to solve Chinese-style inflation is to start with the low interest rate policy and make the big bubble in the whole real estate market transition smoothly.
Since 2004, the Bank of China has raised interest rates six times. In the interview, the reporter learned that some experts believe that in the current situation that foreign exchange control is not very effective and hot money is pouring in, raising interest rates will only lead to the continuous inflow of international hot money into China on a larger scale and at a faster speed, making the problem of excess liquidity more serious, which has been fully proved in the past six months.
"I can't stand lonely monetary policies-although these policies are like lice on elephants, they keep biting and biting, but elephants don't feel anything. Continue to press' Greenspan's little trick' (who stipulates that each rate hike can only be around 1/4 points? Bite down, monetary policy itself is dangerous-I don't know that this kind of small regulation can't fundamentally curb inflation and the rise of asset prices, but it will exhaust valuable monetary policy resources before the real crisis comes. " Teng Tai said.
Yi Xianrong said: "With such high inflation, the central bank should not only raise interest rates, but also speed up the rate hike. The United States did not react until it increased to 4.5%. According to the present way, we should adjust 1 1 times at least. I believe there will be two or three interest rate hikes this year. " In addition, he also stressed the need to use "combination boxing" to regulate real estate prices while raising interest rates.
The central government has been cracking down on land hoarding and over-selling, but with little effect. A few days ago, the statements of listed real estate companies exposed everything. According to industry analysis, these enclosure people are optimistic about the next three to five years. For example, the land is developed by stages in five years, and the land price increases by 20% in one year, and some companies can't use it up in 10 years.
Yi Xianrong said: "It doesn't matter if the director hoards the land. The question is whether the government has auctioned the land and whether the Secretary has paid the land transfer fee. There are a lot of black-box operations in this. If the government dares to make up its mind to recover all the land that has not paid the land transfer fee, or let the real estate agent pay all the money, plus the loan interest, who dares to hoard the land? House prices will come down soon. "
However, Guifang Wen believes that the commercial housing market is highly market-oriented, and the government should not regulate the price of commercial housing, but should change its concept, and need to protect low-income people and serve the public. "■