In November this year, data released by China's National Bureau of Statistics showed that China's consumer price index (CPI) increased by 0 year-on-year5%。This is the second month in a row of negative growth, and the largest decline in recent years. In July, October and November of this year, the CPI was **. 2% and 05%。This situation of negative growth requires our attention.
However, what is more worrying is that in the case of a large increase in currency issuance, prices have not been **, and even negative growth has occurred. At the end of last year, China's monetary ** volume (m2) was 2664 trillion yuan, and by the end of October this year, the amount of money increased to 2882 trillion yuan, an increase of 22 trillion yuan in just 10 months. According to the theory of traditional economics, too much money** leads to inflation, but the situation now shows the opposite.
Negative price growth means that consumers have more purchasing power for money in their hands, especially when prices are high, and the same amount of money can buy more goods and services. However, despite the extremely low CPI growth rate, only 03%, which is even lower than the target growth rate of 2% this year, but consumption growth has not been sufficiently stimulated.
When the 22 trillion yuan of additional currency issuance entered the market, we couldn't help but ask, where did the money go? Are they really in the pockets of ordinary people, stimulating consumption and economic growth? At the same time, we are concerned about the risk of deflation.
At present, what causes this phenomenon still needs further in-depth research and interpretation. It has been argued that there is a problem with the transmission mechanism of monetary policy, resulting in the inability of monetary increases to be directly translated into real economic activity. On the other hand, consumer demand may be constrained by a variety of factors, such as low consumer confidence and unequal income distribution.
Whatever the reason, how to solve this problem has become an important issue in front of us. On the one hand, it is necessary to strengthen the effective transmission of monetary policy to ensure that financial resources can be better invested in the real economy and support innovation and entrepreneurship. On the other hand, measures need to be taken to stimulate consumer demand, boost market confidence, and promote consumption growth.
While analyzing the problem, we also need to realize that conventional economics believes that moderate inflation is good for economic growth, but in the current situation, the inflation rate is too low. This may be related to factors such as China's economic restructuring and consumption upgrading.
With the transformation and upgrading of China's economy, consumers' consumption concepts are also changing. More and more people pay more attention to product quality, brand value and service experience. Therefore, the impact of changes in commodities on their purchasing decisions may be relatively small. In addition, China's supply-side structural reform is also advancing, which may lead to overcapacity in some industries, which will affect the overall CPI growth.
From this perspective, the current low inflation environment is not entirely a bad thing. On the contrary, by stabilizing prices and increasing the purchasing power of consumers, we can encourage consumers to consume more rationally, promote consumption upgrading, and promote the optimization and transformation of economic structure.
To sum up, the problem of continuous negative growth of China's CPI needs our attention. Although the currency was issued by 22 trillion yuan, prices did not **, and consumption growth was not fully stimulated. In solving this problem, we need to strengthen the transmission of monetary policy to ensure that funds are invested in the real economy; At the same time, measures are also needed to stimulate consumer demand and boost market confidence. In addition, we should fully recognize the importance of promoting consumption upgrading and economic structure optimization in the current context of low inflation.
In the face of this problem, I personally believe that it is necessary to comprehensively use macroeconomic regulation and control, supply and demand balance and other means to solve it. In addition, it is also necessary to strengthen in-depth research on consumer needs, promote the transformation of consumption concepts, and allow consumers to make consumption choices more rationally. In addition, we need to further increase innovation, cultivate new consumption growth points, and guide and stimulate consumption potential.
All in all, the current phenomenon of negative CPI growth in China needs to be paid attention to and measures taken to solve it. By strengthening monetary policy transmission and stimulating consumer demand, and promoting economic growth and structural adjustment, we can better cope with the challenges and achieve sustainable economic development.