China to maintain price stability in 2022 with strong efforts – Xinhua

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BEIJING, Feb. 11 (Xinhua) — Looking to 2022, China has a solid foundation for stable prices after prices stayed within a proper range throughout 2021, experts said.

The moderate upward trend in China’s consumer price index (CPI), the main gauge of inflation, is expected to continue this year, said Liu Zhicheng of the Chinese Academy of Macroeconomic Research, a group think tank under the National Development and Reform Commission.

Meanwhile, inflation in the Producer Price Index (PPI), which measures the costs of goods leaving the factory, could gradually decline, with greater coordination of price trends in markets. upstream and downstream, noted the researcher.

For the whole of 2021, China’s CPI remained well below the annual target gaining 0.9%, 1.6 percentage points lower than the previous year, according to official data.

The CPI, initially low but later stable during the period, rose slightly throughout last year due to a sharp drop in pork prices and relatively stable service prices, Liu said in the research note.

In 2021, China hit an optimal combination of higher growth and lower inflation, Liu said, citing the country’s 8.1% GDP growth compared to its 0.9% rise in the CPI.

According to Liu, commodity prices in the international market have increased significantly in 2021 due to factors such as the global economic recovery, floods of liquidity, supply bottlenecks and extreme weather conditions, increasing the cost pressure on downstream enterprises and disrupting industrial chains and supply chains, which also led to the rise of China’s PPI.

China has helped stabilize the global price level as part of efforts to stabilize domestic prices, Liu noted.

The country, with effective epidemic containment measures, has a resilient economy with stable production order and prudent monetary policy, he added.

Price movements should be more dependent on endogenous factors, as the external impact of the epidemic could gradually weaken, according to the researcher.

China’s economy has continued to recover, and the ability to effectively respond to abnormal market price fluctuations has increased significantly, with sufficient supplies of products, services, important raw materials and energy, Liu said.

Wen Bin, chief analyst at China Minsheng Bank, said China should continue to ensure supply and stabilize bulk commodity prices, cope with imported inflationary pressures and stimulate strong domestic market potential.

“More work needs to be done to balance and coordinate the goals of stabilizing growth, controlling inflation and preventing risk,” he said.

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