On May 16th, the State Council held a press conference on the operation of the national economy in April, 2022. Fu Linghui, spokesperson of the National Bureau of Statistics and director of the General Statistics Department of the National Economy, said that although the increase in consumer prices has expanded recently, on the whole, the market supply capacity of goods and services in China is relatively sufficient, and there are many favorable conditions for maintaining price stability.
First, food prices are stable and have a foundation. Recently, international food prices have been rising, but the domestic situation has remained generally stable. China’s grain production has been stable at more than 1.3 trillion Jin for seven consecutive years, and its inventory is relatively sufficient. The output of two kinds of rations, rice and wheat, has exceeded the demand for many years in a row, and a small amount of imports are mainly for variety adjustment. Corn and soybean have a certain import volume, which will be affected by the international market to a certain extent, but the impact is limited. Since the beginning of this year, China’s grain production situation has continued to improve, and there is a good foundation for maintaining stable grain prices. At present, the pig production capacity is relatively sufficient, and the pork price is still declining year-on-year. In the later period, due to the gradual adjustment of pig production capacity, the pork price will pick up, but the range is limited.
Second, the energy supply is stable and secure. China’s oil and natural gas exploitation ratio is relatively high, and the rising price of international energy products will increase the import cost to a certain extent, bring import influence to some industries, and increase the pressure of cost-driven price increase. However, it should be noted that China’s main energy source is coal, while China’s coal reserves are relatively rich and its production capacity is strong. With the gradual release of advanced coal production capacity, it is conducive to curbing the rise in energy prices. Judging from the situation in April, the year-on-year price increase of China’s coal mining and washing industry dropped by 0.5 percentage points from last month. In April, China’s coal output increased by 10.7% year on year.
Third, the supply capacity of most industrial consumer goods is sufficient. China has a complete industrial system and strong supporting capacity, and the output of major industrial products is in the forefront of the world, laying a solid foundation for product price stability. According to the data in April, the price of industrial consumer goods rose by 3.9% year-on-year, with an increase of 0.4 percentage points over the previous month. The increase was mainly affected by the price of gasoline and diesel. After deducting energy, the price of industrial consumer goods rose by 0.1% month-on-month and 0.7% year-on-year, all of which were relatively low, indicating that the supply capacity of industrial consumer goods in China is relatively abundant.
In addition, the service consumption is still recovering, and the price increase is relatively low. In addition, the efforts to ensure supply and stabilize prices in the market are increasing. Generally speaking, there is a good foundation for China’s price stability.
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