There is no basis for overall price increase in 2020

Although the price increase regulation in 2019 is facing multiple difficulties and pressures, with the implementation of a series of policy measures, the overall domestic price is developing in a good direction. Experts believe that in the next stage, we should strengthen market operation analysis, trend analysis and prediction and early warning, do a good job in ensuring the supply of key commodities in important periods, strive to achieve stable price operation, and provide favorable space for macro-control. In 2020, macro policies will focus on stability, play a greater role in expanding demand, stabilizing growth and stabilizing employment, and prices are expected to maintain stable operation. On January 9, the National Bureau of statistics released the national consumer price index (CPI) and industrial producer price index (PPI) in December 2019. Data shows that CPI rose 4.5% year on year in December, which was the same as last month; PPI fell 0.5% year on year, which was the same as last month. In the whole year of 2019, CPI increased by 2.9% year-on-year, and successfully completed the expected control target of "annual consumer price increase of about 3% set at the beginning of 2019"; PPI increased by 3.5% year-on-year in 2018, and decreased by 0.3%. Experts said that despite multiple difficulties in price increase control in 2019, with the implementation of a series of policy measures, domestic prices are generally developing in a good direction.

In the next stage, we should strengthen market operation analysis, trend analysis, forecast and early warning, ensure the supply of key commodities in important periods, strive to achieve stable price operation, and provide favorable space for macro-control. The year-on-year increase in food prices fell back in 2019. Affected by the structural increase in some food prices, the year-on-year increase in CPI rose from 1.5% at the beginning of the year to 4.5% in November and December. However, the year-on-year growth of CPI was 2.9%, which is in line with the regulatory target of about 3% year-on-year growth of CPI. It is worth noting that the core CPI excluding food and energy prices rose 1.4% year-on-year in December, the same increase as last month, indicating that the overall price level is stable. Shen Yun, Senior Statistician of the city Department of the National Bureau of statistics, said that food prices rose 17.4% year on year in December, down 1.7 percentage points, which is still the main factor affecting CPI growth, about 3.43 percentage points. In food, the price of fresh fruit dropped 8.0% year-on-year, and the drop increased by 1.2 percentage points. The price of beef, mutton, chicken, duck and egg rose between 7.3% and 20.4% year on year, all of which fell to varying degrees. Pork prices rose 97.0% year on year, down 13.2 percentage points. In December, non food prices rose 1.3% year on year. Among them, the prices of health care, education, culture, entertainment and clothing increased by 2.1%, 1.8% and 0.8% respectively, while the prices of transportation and communication decreased by 0.7%. From a month on month basis, in December, CPI rose 0.4% from last month to flat. Among them, food prices increased by 1.8% last month to decrease by 0.4%, affecting CPI to decrease by about 0.08%.

In food, with the positive changes in pig production, the central and local reserve pork has been put in successively, the import volume has increased, and the tight situation of pork supply has been further eased. The price has changed from 3.8% month on month to 5.6% month on month, affecting the CPI decline by about 0.27%. Under the influence of the decrease of pork price, the price of beef and mutton fell to 0.1% and 0.2% from 2.8% and 1.3% respectively, while the price of chicken and duck fell to 4.9% and 1.9% from 4.3% and 3.6% respectively. The supply of eggs was sufficient, and the price dropped by 5.5% and the drop increased by 4.8%. In the non food sector, affected by the price adjustment, LPG prices rose 4.0% month on month, while gasoline and diesel prices rose 1.4% month on month. "The main reason for the rise in food prices is the rise in pork prices. The rapid rise in pork prices in the second half of 2019 has led to the continuous rise of CPI's new price factors, which has driven CPI to a higher level." Liu Xuezhi, senior researcher of Bank of communications Financial Research Center, said. In terms of PPI, PPI fell 0.5% year on year in December, 0.9 percentage points lower than last month. Among them, the price of means of production decreased by 1.2%, and the decrease narrowed by 1.3%; the price of means of living increased by 1.3%, and the increase dropped by 0.3%. From a month on month perspective, PPI fell 0.1% from the previous month to flat. Among them, the price of means of production decreased by 0.2% from the previous month to flat; the price of means of living increased by 0.3% to decreased by 0.2%. Pork supply is guaranteed. From the perspective of CPI in each month of 2019, the structural increase in food prices, especially the significant increase in pork prices, is an important factor affecting the year-on-year increase in CPI.

Since 2019, affected by the situation of swine fever in Africa and other factors, the supply of pork market has been slightly tight, leading to a steady rise in prices. In order to maintain the overall stability of the price level, measures have been taken from the central government to the local government to stabilize pig production and supply and price in the pork market. According to the introduction, according to the decision-making and deployment of the central government, the national development and Reform Commission, the Ministry of agriculture and rural areas and other departments jointly issued a series of policies and measures for stable production and supply of pigs. For example, we should adjust the green channel policy, continue to implement the loan discount, and shorten the granting time of CSFV killing subsidy in Africa. Among them, frozen pork reserve is one of the main tasks for the country to ensure the supply and price stability of pork market. In March 2019, the central frozen pork reserve collection and storage work was started, and local collection and storage were carried out at the same time. A certain scale of frozen pork reserve has laid a solid foundation for the work of supply and price stabilization in pork market. During the national day of the Mid Autumn Festival in 2019, the central government invested 30000 tons of central reserves in three batches, and some local governments also organized the investment. On the eve of the Spring Festival, the central government recently organized another five batches of central reserves, totaling about 130000 tons. Most provinces and major cities in the country have also launched the product in combination with the local market situation.

Through the up-down linkage and intensive investment of frozen pork reserve, the market supply of pork is increased, the market expectation is effectively stabilized, and the market price of pork is relatively stable. In the past month, the average retail price of pork (lean and lean meat) in supermarkets in 36 large and medium-sized cities has remained stable. "In order to ensure the supply and price stability of pork market in the later stage, frozen pork reserve is an indispensable and reliable hand, no matter in the main production area or the main sales area of pigs. In terms of delivery, it is mainly aimed at the peak season of consumption and when the price is high, which can increase the market supply, stabilize the market expectation and promote the stable operation of the price. " The head of the national development and Reform Commission said that in the future, it will continue to organize the investment of frozen pork reserves to ensure the basic consumption needs of urban and rural residents. The reporter learned that, in order to further ensure the supply of pork market, the relevant departments also further guide the production and marketing connection, expand the import of pork, actively increase the supply of necessities, especially pork, beef and mutton, poultry, eggs, aquatic products and other substitutes, strengthen the market price supervision, and strictly prevent artificial price increase outside the supply and demand.

Prices are expected to maintain stable operation. With the completion of the price control target in 2019, consumers are more concerned about the price trend in 2020. "From the basic point of view, the transformation of new and old driving forces of China's economy has been significantly accelerated, the resilience and vitality of the domestic market have been further enhanced, and the economy has achieved a dynamic balance of supply and demand at a higher level, which is the key to the stable operation of the overall price level Cornerstone. The domestic industrial and agricultural production is stable, the market supply is sufficient, the main grain income increases, the fruits such as apples and pears are high-yield, and the vegetable supply capacity continues to grow. Although the scale of pig marketing has declined, the overall supply of meat protein is stable, and there is no basis for overall price rise. " Guo Liyan, a researcher at the Institute of market and price of the Chinese Academy of macroeconomic research, said. Guo Liyan said that at present, the supply of pork reserves has maintained a considerable strength and pace, the arrival of meat imports has been accelerated, the market circulation and supply channels have been fully unblocked, and an efficient and effective combination has been made. In December, the price of pork changed from a month on month rise to a fall, which is a positive result of taking multiple measures to increase the supply and price stability.

As a series of work results continue to show, in 2020, the support of meat price for CPI's new price increase will be significantly eliminated. Overall, the year-on-year increase of CPI in 2020 may be slightly higher than that in 2019, but the core CPI excluding food and energy will keep the central operation stable. Zhou Maohua, an analyst at the financial market department of Everbright Bank, believes that the current trend of pig supply recovery is strong, and pork prices across the country are stable and falling. Considering the tail raising effect, the peak of CPI in 2020 may be in the first quarter, but the year-on-year increase of CPI will also fall steadily as pig prices fall. Relevant departments said that they will continue to strengthen market operation analysis, trend analysis and prediction and early warning, guide enterprises to further expand imports, continue to strengthen production and marketing links and market monitoring, ensure the stable operation of the pork market, and provide reliable guarantee for the stable operation of prices. From the perspective of PPI, Guo Liyan analyzed that at this stage, the supply side structural reform has entered the stage of consolidating and establishing a long-term mechanism.

In the early stage, the price increase effect caused by the acceleration of supply contraction, such as quantitative capacity reduction and environmental protection production restriction, has basically been released. In addition, affected by the overall fluctuation of international bulk industrial prices, it is expected that the prices of upstream industrial raw materials will remain low in the next year. "The current counter cyclical regulation policy is strengthening and improving efficiency, which has played a positive role in boosting infrastructure construction, especially new infrastructure construction, stabilizing the investment of social main bodies and the expectation of residents' consumption. The regional recovery of downstream industrial demand and construction demand, the stage rise of prices of some industrial products such as building materials, etc., is expected to show a slight rebound in PPI in 2020, which will remain stable in general " Guo Liyan said. Liu Xuezhi said that 2020 is the decisive year for building a moderately prosperous society in an all-round way. Macro policies will focus on stability, play a greater role in expanding demand, stabilizing growth and stabilizing employment, and ensure the economic operation in a reasonable range.