Can China Win its Anti-Inflation Battle?

来源：百度文库编辑：神马文学网时间：2024/06/30 19:07:55

China cautious about side effects of anti-inflation measures: Inflation is the biggest risk for China's economy when prices are rising sharply. But China's efforts to curb inflation must not come at the cost of economic growth and stock market, which is why the central bank has been very cautious about interest rate hike. What are in China's tool box to deal with the challenge?

Financialized Cabbage Too Hard To Digest

Inflation expectations greater threat than real inflation: Excessive liquidity is increasingly affecting prices. Speculative capital has attacked a range of agricultural products this year, such as garlic, ginger and cotton, which has lead to soaring prices.
Minister: China hit by imported inflation: Dollar issuance by the United States is "out of control", leading to an inflation assault on China.
Imported inflation part of problem in China: Imported inflation spurred by the recent QE policy in the United States has heightened China's inflationary burden.
Prices of China's major imported products, including cotton, soybeans, copper and crude oil, have all seen a big surge in the past two months.

Take Actions To Stablize Prices

Chinese ministries, local governments coordinate efforts to battle price hikes: Chinese ministries and local governments have coordinated efforts to combat price hikes by increasing grain supplies, clamping down on speculation and offering subsidies, as the central government has growing concerns about rising inflation.
China to increase grain supplies to combat inflation: The Chinese government will increase grain supplies to meet people's needs and stabilize market prices.
Chinese government announces guidelines to tame price rises: China's State Council, or the cabinet, announced Wednesday price control guidelines to reassure consumers under inflationary pressures, and urged local authorities to offer temporary subsidies to needy families.
NDRC: Local gov'ts to control prices: China's top economic planning body, the National Development and Reform Commission, is asking local governments to stabilize commodity prices.
Tianjin lowers costs of agricultural transport: The Tianjin municipal government is lowering transportation costs on select agricultural products to combat rising prices for producers. It has even slashed tolls on the city's expressways.

Put Under The Test of Market

NBS: No need to panic on commodity prices: "The current level of inflation is driven by soaring food prices. The basic supply and demand situation remain unchanged, with production surpassing consumption. What's happening in China will not turn into a broad-based price rise."
NDRC: China can ensure price stability: China has adequate government reserves of soybeans and edible oils, and the supply of agricultural products and daily public necessities is sufficient. And the production capacity of industrial consumption products is far beyond domestic demand.
Regulations force decline in agricultural prices: The Chinese government's strong measures to stabilize the prices of agricultural products have achieved initial success, with the prices of some products beginning to fall.
China's commodity future prices fall on anti-inflation measures, NDRC says: China's top economic planning agency said Thursday the country's commodity futures prices had declined since the government stepped up measures to battle inflation.

What's More Can Be Done?

China can afford more bank reserve hike: Although high inflation rates have pushed deposit rates to negative, hurting low income-earners, the central bank should focus on solving macro-econometric issues。
More overseas investment can curb China's inflation: The excessive liquidity as a result of the domestic and international loose monetary environment is building up a challenging situation for China's macro-control efforts for its economy. On Monday, People's Daily called for relaxed control on China's current account to encourage more outbound investment by Chinese enterprises to curb the speculative attacks on China's agricultural prices.
China loan growth of 15% enough - PBOC adviser: Loan growth of around 15 percent in 2011 will be sufficient to underpin China's economic growth, a central bank adviser said on Thursday, adding to signs that lending targets will be cut next year to slow credit growth.
China to intensify liquidity management: central bank: A statement of China's central bank said Wednesday that the country would continue using multiple monetary policy tools to enhance liquidity management and guide the money and credit growth back to normal.
More flexible yuan can help brake inflation: expert: The fluctuation range of China's currency exchange rate can be further broadened to help curb rising inflation, said Li Daokui, a member of the monetary policy committee of the People's Bank of China.

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