There are many favorable factors for the steady development of the Chinese economy and the price situation is generally controllable

On November 16, the central bank released China’s monetary policy implementation report for the third quarter of 2019. According to the report, there are many favorable factors for China’s stable economic development in the future. China’s development is still in and will be in an important period of strategic opportunities for a long time. Substantial progress has been made in the three major battles. The structural reform on the supply side has been deepened, economic growth has remained resilient, the employment situation has remained stable, the income of residents has grown steadily, people’s lives have continued to improve, and sustained healthy economic development and overall social stability have been maintained. Active fiscal policy and steady monetary policy have been gradually launched, and financial services for the real economy, especially for private enterprises and small and micro enterprises, have been increasing. The resumption of China US economic and trade negotiations will help stabilize market confidence. The prevention and control of financial risks was carried out steadily and decisively, the momentum of high-speed growth of macro leverage rate was initially curbed, the overall financial risks were under control, and the quality and efficiency of financial services to the real economy gradually improved. The exchange rate of RMB is basically stable at a reasonable and balanced level, and its ability to cope with external shocks is enhanced.
It should also be noted that the current external environment is complex, the downward pressure on the economy continues to increase, and some enterprises face more difficulties in operation. Global economic growth slowed down, monetary policy in major economies turned loose, geopolitical risks remained high, and external uncertainties and instability increased. There are many risks and challenges in the operation of domestic economy. The production investment of enterprises tends to be cautious. The growth of manufacturing investment and private investment slows down. The external demand weakens the pressure on the export growth, and the endogenous growth momentum of economy needs to be further enhanced. In this regard, we should have an objective understanding and a rational view, firm confidence and firm determination, make full preparations, do our own business conscientiously, strengthen counter cyclical regulation, strengthen structural adjustment, and combine reform and regulation, short-term and long-term, internal and external equilibrium, so as to promote the formation of effective final demand and new growth points.
The price situation is generally under control, and uncertainties have increased. The price increase mainly depends on the economic fundamentals and the relative changes of market supply and demand. In the near future, the domestic economy has been running steadily on the whole, and the total supply and demand are basically balanced; the supply side structural reform has been further promoted, and the role of the market mechanism has been better played. At present, there is no basis for sustained inflation or deflation in China. However, affected by the epidemic situation and cyclical factors in Africa, the price of pork increased rapidly, and the consumption substitution effect led to the price of other meat, poultry and eggs also increased, which led to the increase of the price of consumer goods. The production demand margin of enterprises is slowing down, the price of bulk commodities is declining year on year, and the base of the same period of last year is higher. However, PPI has been rising continuously in the near future. On the whole, the supply shock caused by the epidemic situation of swine fever still needs to be recovered in a certain period of time. In the short term, consumer prices are still facing upward pressure. It is necessary to continue to closely monitor the dynamic changes and guard against the divergence of inflation expectations.

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