One morning this weekend, the National Bureau of Statistics announced an unexpected news: in November this year, China's consumer ** index (CPI) fell by 05%, two consecutive months of negative growth, and the decline reached the largest in recent years. It is worth noting that in July this year, the CPI was **0 for the first timeAfter 3%, it quickly rebounded to positive growth in August. However, it slipped again by 0After 2%, growth did not return to positive growth in November, but fell to 05%。This flurry of data is worrying, as moderate inflation is good for economic growth, but too low inflation can trigger a downturn. Inflation is usually around 2% as a moderate level. The current abnormally low inflation rate will lead to certain problems, not least the risk of deflation.
Breaking the conventions of economics, it is incomprehensible that although China's currency issuance is huge, and the total amount of money has increased by 22 trillion yuan in 11 months, it has not led to inflation, but has seen a negative growth in prices. What's even more confusing is that, in general, prices mean that people can buy more for the same amount of money. However, the overall increase in CPI from January to November this year was only 03%, well below the full-year growth target of 2%. Despite the increased purchasing power of consumers, consumer demand still needs to be further stimulated. This situation makes people feel helpless, and the additional issuance of 22 trillion yuan of currency has gone to the first placeIt has not entered the realm of public consumption and has not triggered inflation, does this mean that we are facing the risk of deflation?
According to the analysis, there may be a number of reasons for this. First of all, due to the impact of the epidemic, China's economy has been greatly impacted this year, and the industrial chain is limited, resulting in low investment willingness of enterprises. Second, despite the large scale of additional currency issuance, most of it went to financial markets, not the real economy. In addition, consumer confidence is relatively subdued and has not yet fully recovered to pre-pandemic levels, which also limits the growth of consumption.
In this case, measures need to be taken to stimulate consumer demand and promote economic growth. On the one hand, measures such as tax cuts and fee reductions can be used to increase residents' disposable income, improve consumer confidence, and stimulate consumption potential. On the other hand, we will increase support for the real economy, guide the flow of money to the real industry, and boost economic recovery. In addition, strengthening structural reform and optimizing the environment for economic development are also important measures. Only by comprehensively using a variety of means can we effectively resolve the risk of deflation and achieve stable and sustainable economic development.
In economics, it is generally accepted that moderate inflation is good for economic growth. Inflation can stimulate consumption and investment demand, prompting companies to increase production and capital input, thereby achieving economic growth. However, high inflation can lead to prices**, affect corporate profit margins, and may even trigger economic turmoil. Conversely, low inflation and even deflation will increase the purchasing power of consumers, but it may also lead to a decline in corporate profits, stifling investment and weakening the overall economy.
From a practical point of view, our country is facing the risk of deflation, not inflation. In November this year, the CPI fell by 05%, negative growth for two consecutive months, which has aroused concerns and thinking in the economic circles.
First, how to deal with the risk of deflation?Economic policy should be more cautious in the face of deflationary risks than inflation. At present, China has introduced a series of fiscal and monetary policies to stimulate the economy and ensure market stability. However, whether these policies are effective enough to solve the problems we face needs to be further observed and evaluated. In addition, with the changes and development of the economy, policies should be adjusted in a timely manner to adapt to the new situation and needs.
Second, how to balance the relationship between inflation and deflation?Inflation and deflation are interrelated and indispensable. For China, while controlling inflation, it is also necessary to avoid and resolve potential deflationary risks. To this end, it is necessary to effectively regulate and control the amount of currency, strengthen macroeconomic regulation and control, and promote stable economic development. In addition, it is necessary to strengthen support for the real economy, enhance consumer confidence, and promote the further release of the potential of the consumer market.
Finally, economic development requires the participation and joint efforts of the whole society. Businesses and individuals have a responsibility to play an active role in development. ** We should increase support for the real economy, provide more policy support and facilitation conditions for enterprises, and encourage and promote innovation and entrepreneurship. Enterprises should enhance their core competitiveness, improve the quality of products and services, and meet market demand. Individuals should enhance consumer confidence, consume rationally, and promote a virtuous cycle of the economy.
To sum up, although China's currency issuance increased by 22 trillion yuan, the risk of deflation still exists. The current inflation rate is unusually low, with the CPI falling 05%, two consecutive months of negative growth. This suggests that we need to take appropriate measures to stimulate consumer demand and promote economic growth. While ensuring price stability, it is necessary to increase support for the real economy, enhance consumer confidence, and stimulate consumption potential. Only by rationally balancing the relationship between inflation and deflation and forming a good environment for economic development can we achieve stable and sustainable economic development. At this critical moment, enterprises and individuals need to actively participate and work hard to contribute to economic development and create a better future.
Between inflation and deflation, the balance and development of economic growth. "This is an important issue for us in the face of the current economic situation, and it is also a challenge that requires the joint efforts of the whole society. In the face of this challenge, how we should respond, how to balance, and how to promote economic growth are questions that each of us needs to think about and act. Let us join hands with an optimistic attitude and positive actions to contribute to economic development and create a better future together.