Events: Andy Xie: Inflation is the only way to stop is to let prices fall
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The paper further pointed out that the only way now is to let prices fall, so that even out of current central policy on the property, give us a hope. But it does not rule root. Inflation is inevitable, and money has been put out of bad ones out. Stability is the need to take interest and inflation transferred balance, so that people feel assured that the money in the bank, only stability.
Since 1996, China has been a deflationary economy, because the state-owned enterprise reform, workers were laid off, a large labor surplus. 2005 turned into inflation-based economy, the performance of a fuse to form a inflation, especially the capital surplus likely to cause inflation. Basic labor market equilibrium and there is a shortage of energy market reasons for the change. The highest CPI increase in 2007 was up 6.9%, began raising interest rates. After the deflation of the financial crisis, but also introduced a stimulus, but only caused short-term representation of the financial crisis, does not change the nature of the inflation-based economy. I think that inflation in China is currently facing a very severe conditions, improper handling can cause the crisis.
A fuel inflation in China's internal engine, its power come from? Tied together a lot of interest, local government revenue through substantial real estate finance, state-owned enterprises should rely on equity financing. Many people gave the stock market provides an investment opportunity, the expansion will increase the wealth of the stock market, investment funds are also driving forces behind the input drive. Many people want to Sign fortune, which is money the main reason behind the super-fat.
Now lets talk about the inflation level has admitted that inflation is fairly severe, and will certainly have to tighten the money supply, money will swap land, 10 years, land prices have risen nearly 20 times, popular local rose more than 100 times. CPI is now up 4% from 1% rise. If handled properly, will be the same as land prices rise, how much volatility will cause social ah.
Quickly reform. Why are so good the past few years the economy is many times caused by the reform and adjustment. To break the iron rice bowl state-owned enterprises, urban housing reform, joined the WTO, attracting a large number of foreign investment, develop infrastructure and so on. Should continue to reform, or foundation to be emptied.
Inflation is adjusted for it, hike up to get balance. Faction cadres who go to see who'll catch up speculation, it does not work. The primary task of reform is to find out how much money the government in the end, to restrict government spending. Many issues are coming from here, do not be a major reform. |
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