Continuous and Stable Operation with Support for Ensuring Supply and Stable Prices - Perspective on China's Price Data in the First Half of the Year | year-on-year | China

Beijing, July 10th (Xinhua News Agency) - Continuous and Stable Operation with Support for Supply and Price Stability - Perspective on China's Price Data in the First Half of the Year

Xinhua News Agency reporter

On the 10th, the National Bureau of Statistics released data showing that in the first half of this year, the national consumer price index increased by 0.7% compared to the same period last year, while the national industrial producer price index decreased by 3.1% year-on-year.

Since the beginning of this year, due to multiple factors, the domestic price increase has slightly declined, but overall it has operated within a reasonable range. Looking ahead to the second half of the year, China's prices may continue to rise moderately, providing solid support for ensuring supply and stabilizing prices.

CPI overall maintains stable operation

Stabilizing prices is an important task for doing a good job in this year's economic work. This year's government work report sets the expected target for the annual increase in consumer prices for residents at around 3%.

Statistical data shows that in the first half of the year, CPI continued to operate within a reasonable range, with monthly year-on-year growth rates below the expected target of around 3%. Among them, the growth rate from March to June remained at a low level of less than 1%.

In the early morning, the vegetable trading area of the Red Star Global Agricultural Products Wholesale Center located in Changsha, Hunan was bustling with activity. "In the first half of the year, the market vegetable trading volume increased by 52% year-on-year, and the average trading price decreased by 7% year-on-year," said Zhang Yong, Director of the Information and Digitalization Center of Red Star Global Agricultural Products Wholesale Center.

Industry insiders analyze that the time difference between supply and demand recovery is the main reason for the sustained decline in CPI growth this year.

"The production, distribution, circulation, consumption and other links of the real economy itself have a process. After the comprehensive restoration of normal operation of the economy and society, domestic production accelerates the recovery. However, demand is constrained by factors such as income distribution differentiation and unstable income expectations, and the recovery still lags behind." said Wang Likun, Deputy Researcher at the Market Economy Research Institute of the Development Research Center of the State Council.

In China's CPI basket of goods, food accounts for a relatively high proportion. Last year, due to the crisis in Ukraine and other factors, the prices of food and other commodities increased significantly, resulting in a relatively low price increase this year.

From the core CPI excluding food and energy prices, the domestic market supply and demand remain generally stable. In the first half of the year, the core CPI increased by 0.7% year-on-year, continuing a mild upward trend.

"At present, the overall CPI growth rate is operating at a low level, and the core CPI growth rate is also at a relatively low level. This is due to multiple factors such as the complex and severe international environment, the sluggish world economy, still insufficient domestic demand, and a relatively high base in the same period last year. Overall, it is a phased period," said Fu Linghui, spokesperson for the National Bureau of Statistics.

PPI growth continues to decline

Affected by fluctuations in international commodity prices and a relatively high base compared to the same period last year, PPI has continued to decline since the beginning of this year, with the decline expanding month by month. In June, it decreased by 5.4% year-on-year, an increase of 0.8 percentage points compared to the previous month.

According to Fu Linghui's analysis, the world economy is experiencing sluggish growth, and the overall decline in prices of international energy and other commodities is gradually showing its impact on China's imports. In addition, some industries still have insufficient domestic market demand, with sufficient domestic production capacity in industries such as steel and building materials. However, market demand is still recovering, leading to a decrease in related prices.

Statistical data shows that in June, the prices of oil and gas extraction industry, petroleum coal and other fuel processing industry, chemical raw material and chemical product manufacturing industry, coal mining and washing industry decreased by 14.9% to 25.6% year-on-year, and the decline has all expanded. The prices of black metal smelting and rolling processing industry, non-ferrous metal smelting and rolling processing industry decreased by 16% and 7.2% year-on-year, respectively.

Accelerate the construction of charging stations, energy storage facilities, and the renovation of supporting power grids; Continue to promote the activities of new energy vehicles, green smart home appliances, and green building materials going to rural areas; Carry out consumer promotion activities such as home appliance replacement and car purchase subsidies... Recently, various parties have focused on the demand side and launched a series of measures to activate the endogenous driving force of enterprise development.

"With the implementation of policies and measures to boost the development of industrial economy, enterprises' production and operation are steadily advancing, demand for industrial products is gradually recovering, and the cumulative base effect is weakening. PPI is expected to moderately rebound in the second half of the year," said Wang Likun.

Maintaining stable prices with support

Price relations affect the operation of the economy and affect the lives of the people. The long-term control of price increases at a relatively stable level leaves ample space for macroeconomic policy regulation, which can effectively support the operation of the economy within a reasonable range.

The price of pork accounts for a high proportion of food prices and has a significant impact on the operation of CPI. In response to the recent continuous decline in pork prices, the National Development and Reform Commission will work with relevant parties to launch the second batch of central pork reserve collection and storage work within the year, and guide various regions to synchronize collection and storage, promoting the return of pig prices to a reasonable range as soon as possible.

At present, the country is about to enter a critical period of "seven down and eight up" flood prevention. In order to ensure that important livelihood goods during the flood season are continuously stocked and not sold out, many parts of the country are increasing their emergency supply efforts. Jiangsu has identified 881 emergency supply enterprises for daily necessities, established a dedicated supply network, increased supply outlets, and tracked and monitored the price trend of grain, oil, meat, eggs, and vegetables.

The National Energy Administration urges power generation enterprises to implement stable supply of coal and gas, sign medium and long-term contract agreements for coal and gas with quality and quantity guaranteed, and actively respond to the peak electricity consumption this summer; Hubei and Beijing issue a new round of consumption vouchers; The e-commerce platform Meituan Maicai has increased the supply of seasonal fruits and fresh products such as lychees and peaches, and daily updates on affordable markets and super discount channels... In recent times, all parties have coordinated efforts to ensure supply and stabilize prices.

The Xinfadi market is known as the "basket of vegetables" for Beijing citizens. According to Tong Wei, the person in charge of Xinfadi Market, recently, local tomatoes in Chifeng, Inner Mongolia, Chengde, Hebei, and Beijing have all entered the harvest period, and local eggplants have started to go on the market, with sufficient vegetable supply.

"Throughout the year, with the steady expansion of market demand in China and the gradual increase in production and supply, the supply-demand relationship is expected to remain generally stable, and overall consumer prices are expected to maintain a moderate increase," said Fu Linghui.