CPI's annual negative growth rate of 8.3% is a conservative guess

According to the statistical information release schedule of the National Bureau of Statistics, a quarterly press conference on the operation of the national economy will be held on October 22, and all macro data including third-quarter GDP, September CPI, and PPI will be fully presented. However, a "Annual Report on China's Economic Situation Analysis and Forecasting" (hereinafter referred to as the "Report") issued by the Chinese Academy of Social Sciences recently predicted in advance the economic performance of the whole year of 2009.
8.3% is a conservative guess Wang Tongsan, the economics department of the Chinese Academy of Social Sciences, said that the GDP growth rate in 2009 could reach 8.3%, exceeding the requirements of the “Babao” mission. In 2010, the growth rate will return to 9%, or even higher. JP Morgan Chase also predicted in a macroeconomic report yesterday that China's GDP growth rate is expected to be around 8.5% in the third quarter of 2009.
The "Report" pointed out that under the impetus of a package of economic stimulus policies, fixed asset investment has become the main driving force for expanding domestic demand and ensuring growth. It is estimated that the whole society's fixed assets investment will be about 2,724 billion yuan in the whole year. Excluding the price factor, the actual growth rate of investment is 34.4%, which is 2.26 times of the actual growth rate of investment last year.
“The forecast of 8.3% is a bit conservative. According to the current recovery of exports and the determination of the central government to implement fixed investment, the economy may rebound significantly in the short term,” said a researcher at the Macroeconomic Research Institute of the National Development and Reform Commission.
In the first half of the year, foreign trade continued to decline sharply, and the trade surplus decreased slightly. As a result, the export that the economy has been relying on in recent years has contributed 41% to economic growth and 2.9 percentage points to GDP growth. However, this situation has clearly improved. JPMorgan Chase has exemplified that Shanghai, as the country's largest container port, is recovering its container throughput month by month. It is expected that the decline in the 12th month will be narrowed to 4%, and in the first eight months of this year, this data is still Maintain a 15% decline.
Inflation has no near-worries The "Report" predicts that consumer prices, retail prices of goods and investment products will fall by 0.5%, 0.8% and 1.8% respectively this year. The total retail sales of consumer goods will reach 1,250 billion yuan, an actual increase of 16.3%. Regarding the future price trend, the "Report" believes that there will be no obvious inflation this year and next. On the one hand, the problem of insufficient demand has not been fundamentally alleviated, and on the other hand, overcapacity has become more prominent. Wang Tongsan said that this year's CPI consumer price index is probably still negative, and will turn positive next year, but it will be around 3%, and it will maintain price stability for quite some time.
According to the analysis report of several investment bank research departments, it is a consensus that CPI will continue to become negative this year. At the same time, several institutions expect inflation to fall by 2% year-on-year to a maximum of 4%. It is worth noting that the “input” inflationary pressures that continue to rise in international commodity prices in the future cannot be ignored.
Policy coherence and attention In fact, the subtext of focusing on inflation is to pay attention to monetary policy. Researchers from the Macroeconomic Research Institute of the National Development and Reform Commission told reporters that everyone is looking forward to the upcoming Central Economic Work Conference, which will clarify the direction of the next monetary policy. However, the researcher believes that the policy has been fine-tuned in the past two months, and the possibility of large-scale changes is very small. First, the leaders of the country still call for economic stimulus at the world-class meeting, and on the other hand, because the threat of inflation is not as fast and fierce as expected.
During the Chinese National Day holiday, the Reserve Bank of Australia (the central bank) suddenly decided to raise interest rates. In response, a macroeconomic analyst told reporters that Australia’s interest rate hike does not mean that China will follow suit because Australia is a resource type. It is a wise choice for the state, this type of country to prevent the ups and downs of asset prices in advance, and China currently has other means to regulate liquidity indirectly.
However, Ma Jun, chief economist of Deutsche Bank Greater China, said that Australia's interest rate hike has certain implications for China. Monetary policy should be sufficiently forward-looking. It must be fully realized that from the change of monetary policy to the growth of CPI year-on-year. The real impact usually has a time lag of one year or even more than one year, so it cannot wait until inflation has reached the policy goal and then begins to tighten.

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