Full of vitality and confidence, China remains the global resource factor allocation center.
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A number of leading economic indicators released recently show that positive factors promoting economic recovery are accumulating and strengthening. The good start in the first quarter also laid a good foundation for achieving the expected economic growth target of about 5% for the whole year.
Jin Ruiting, director and researcher of the Institute of Foreign Economics of the China Academy of Macroeconomics, said in an interview with a reporter from People’s Daily Online that China does not have the foundation for long-term price levels to fall. China’s real estate market has the objective conditions to maintain stable and healthy development. China’s debt risks are generally manageable. China is still the allocation center of global resource factors, etc. China’s economy is full of vitality and confidence.
Economic data for the first quarter of 2024 will be released on April 16. What kind of report card will the Chinese economy deliver? On April 11, the National Bureau of Statistics released national CPI (Consumer Price Index) and PPI (Producer Price Index) data for March 2024. Data show that CPI increased by 0.1% year-on-year and decreased by 1.0% month-on-month; PPI decreased by 2.8% year-on-year and decreased by 0.1% month-on-month.
Industry insiders interpreted that my country’s CPI fell back in March and PPI bottomed out, mainly due to normal performance after temporary factors such as holidays receded. The release of this data is not only an objective description of the current economic situation, but also full of new expectations for China’s future rapid development.
“Affected by the complex changes in the internal and external environment, China also faces some difficulties and challenges in further promoting economic recovery. The main reasons are insufficient effective demand, weak social expectations, there are still many risks and hidden dangers, and there are blocking points in the domestic cycle.” Jin Ruiting said , but what is certain is that the above problems are all problems in development and progress, and they can be gradually solved by deepening reform, expanding opening up, promoting innovation and other methods.
CPI is a macroeconomic indicator that reflects changes in the price level of consumer goods and services generally purchased by households. Why was performance in March lower than market expectations?
Wen Bin, chief economist of China Minsheng Bank, gave the answer: “The sharp fall in tourism prices after the holiday is the biggest reason for the decline in core CPI.” From a breakdown, tourism prices fell by 14.2% month-on-month after the holiday, and the decline exceeded that in February. The month-on-month increase was 13.1%, and the year-on-year increase dropped to 6.0% from 23.1% last month. The off-season travel period resulted in significant month-on-month decreases in air tickets and transportation rental fees, and transportation usage and maintenance dropped by 2.4% month-on-month.
However, overall, CPI in March failed to continue the recovery momentum in February. To this end, Wen Bin said that it is recommended to readjust the expectations for the CPI center in the future.
The rise and fall of product prices of industrial enterprises has an important impact on the production development of enterprises and national macro-control. Among them, PPI is a relative number that reflects the degree of change in the ex-factory price level of products of industrial production enterprises. Why did the year-on-year growth rate of PPI fall in March? What industry developments can it reflect?
Ying Xiwen, a senior researcher at the China Minsheng Banking Research Institute, said that since March, affected by the instability in the Middle East and improving world economic demand, global commodity prices have risen overall, international crude oil prices have continued to rise, natural gas prices have flattened, and non-ferrous metal prices have continued to rise. Most are up. Domestic industrial product prices are affected by external transmission, and the prices of some products have rebounded, but the supply of most manufacturing industrial products still exceeds demand. Therefore, my country’s PPI performance in March was in line with market expectations.
“On the one hand, the means of production have declined month-on-month, and midstream demand has been weak; on the other hand, the prices of living materials have continued to decline month-on-month, and downstream demand has been weak.” Ying Xiwen analyzed that from an industry perspective, energy is differentiated, and some products and equipment in the midstream have rebounded. . Upstream coal mining and processing decreased month-on-month, but prices in the oil and natural gas mining industry rebounded, and ferrous and non-ferrous metal mining and processing prices rose and fell. Midstream energy processing, chemical raw materials, chemical fiber, non-ferrous metal processing, etc. increased month-on-month, but pharmaceuticals, rubber, ferrous metal processing, non-metal products, etc. fell. Most equipment manufacturing industries except automobiles rebounded month-on-month.
In addition, Ying Xiwen said that with the arrival of the second quarter, the low base effect of last year’s PPI can play a certain role in narrowing the year-on-year decline.
“Facing the relatively complex economic situation, the tone of the central bank’s first quarter regular meeting has changed from the previous ‘strengthening countercyclical and intercyclical adjustment’ to ‘strengthening countercyclical adjustment.'” Wen Bin said that in March, overall inflation showed downward pressure In this context, the importance of countercyclical adjustment of monetary policy has increased, which also means that the subsequent direction of monetary policy will still be loose, and more powerful monetary policy may be on the way.
(Editors: Wang Renhong, Gao Lei)
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