Policy fine-tuning is the key to stable supply

Experts praised the role of the state in the recovery and analyzed the situation in the United States at the Beijing seminar. Experts and industry insiders said that China may need to make certain policy adjustments to ensure the effective supply of certain industries. To the overall economy and minimize any possible impact of the recent surge in global commodity prices on inflation.

They said that in the second half of the year, compared with China’s development. Any changes in US macroeconomic policies may exacerbate the uncertainty associated with the global economy.

On Saturday, Bank of China International Chief Economist Xu Gao said at a seminar in Beijing that China’s economic recovery is getting stronger on both the supply and demand sides.

At an event organized by the National Development Research Institute of Peking University. Xu said that production restrictions in certain industries may hinder the supply capacity of certain industries such as steel. He further stated that similar restrictive policies should gradually eliminated in order to maintain the stability of the supply side and better defuse inflation.

Data released by the National Bureau of Statistics earlier this month showed that China’s producer price index.

which measures ex-factory prices, rose 9% year-on-year in May, up from 6.8% in April and the highest level in nearly 13 years. .

Xu pointed out that at the regional and local levels. Some restrictive policies on certain industries such as steel may slow the recovery of domestic supply. Therefore, more timely policy adjustments needed in this regard.

Xu warned that although consumer price increases. Which are the main measure of inflation, will remain moderate, price increases at the producer level may affect non-food prices and increase inflationary pressures to a certain extent. As the price of live pigs is currently at a very low level, food prices may remain moderate or stable.

Xu said that he believes that China’s overall CPI growth will be less than 3%. Which is fully within the government’s target range.

Xu said that the world’s two largest economies, the United States and China, are pushing for recovery. He said the two economies are recovering in different ways and complement each other’s growth.

By effectively controlling the COVID-19 pandemic. China has gained a firm foothold in terms of supply and has become an effective global manufacturing supplier. While the United States has shown a strong recovery in demand or quantitative easing through large-scale stimulus. “quantitative easing” Deposit the money directly into the family’s bank account. In China, more support measures have been introduced to reduce the unforeseen epidemic-related burdens faced by enterprises.

At the Beijing seminar, Liang Zhonghua, chief macro analyst at Haitong Securities, said that on a global scale. Economic uncertainty in the second half of this year is more likely to come from the policy stance of the United States rather than China.

Liang also said that he believes that the United States will recover faster than most other economies, and that the conditions for the Federal Reserve to reduce debt purchases are ripe, that is, “reduction.” As the US job market has become strong, inflation has far exceeded the Fed’s 2% target.

“If major economic indicators continue to strengthen, the Fed may send a stronger and clearer exit signal,” Liang said.

However, he said that the actual production cut will not be implemented until later this year.

The World Bank’s “Global Economic Outlook” released earlier this month predicted that China’s GDP will grow by 8.5% this year. Which will greatly help the recovery of the global economy.

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