China Will Face High Inflation Pressure For A Long Time

commodity

To support.

Driven by this demand, the world will be in a stage of increasing demand for agricultural products and raw materials in the next ten years, which will drive the price level of the whole world.

The author believes that for China, this situation is particularly special.

Unlike other emerging markets, China's urbanization has been seriously disconnected between urbanization and industrialization due to long-term restrictions on population mobility. Compared with the higher level of industrialization, China's urbanization is at a relatively low level.

However, after all, this is not a normal state. In the next ten years, with the acceleration of China's urbanization process, a large number of people will pour into the cities. It will require China to provide resources and services for more and more urban populations in all aspects of health care, housing and food, which will inevitably push up the price level of related products and services.

In addition, the acceleration of urbanization will not happen overnight for China. This means that in the long run, while enjoying the contribution of urbanization to economic growth, China will have to endure higher inflation levels.

Under the premise of accelerating urbanization, the rebound pressure of long-term suppressed energy resources prices will also become apparent in the future.

For a long time, China's entire commodity market has enjoyed "subsidized" low energy resources prices, excessive consumption of energy and resources, and destruction of the environment have endanger the sustainable development of China's economy.

In the next ten years, with the expansion of the scale of the economy, this situation is obviously unlikely to be sustained. In the past few years, China has missed several opportunities for price reform of energy resources, which makes reform even more urgent.

In fact, in some areas with high voice, such as energy and water price reform, the government decision making departments have been reforming ideas.

The adjustment scheme of the oil price adjustment mechanism, the step price scheme and the natural gas price in some areas have already been formed.

Predictably, in the next ten years, the rising price of energy resources will become an important factor of long-term inflation in China.

Rising labor costs will also become another major factor pushing up China's longer-term inflation expectations.

The 2011 International Business survey report released by Kyoto Tianhua accounting firm showed that in 2011, 40% of mainland Chinese enterprises expected that the shortage of skilled labor would become an important factor hindering growth this year, which was 17% higher than last year. Another 64% of mainland enterprises plan to raise wages in the next 12 months, which is 20% higher than last year.

The author believes that with the further improvement of the wage level of workers, enterprises will have to face the pressure of increasing labor costs. In order to pass the rising cost pressure, the price of products will be gradually raised and the inflation level will also rise.