CPI and PPI scissors are difficult to bridge the market

Since climbing to a high in the year in August, the national consumer price (CPI) increase has been in the “1st era” for three consecutive months. At the same time, the national industrial producer price (PPI) has been maintained for four consecutive months. The lowest point in the past six years. It is worth noting that the difference between the PPI and the CPI scissors is always difficult to see.

In the industry's view, this not only releases the deflationary signal, but also means that the real economy is under constant pressure. How to resolve excess capacity has become an urgent problem. At the State Council executive meeting held yesterday, Premier Li Keqiang further pointed out that it is necessary to promote production capacity clearing, clean up and dispose of "zombie enterprises", and realize a significant decline in the loss of operating loss enterprises by the end of 2017.

CPI and PPI continue to deviate
Since the beginning of this year, the trend of CPI has shown a moderate upward trend. After the year-on-year increase of 2% in August, there was a slight decline. When many institutions predicted that the CPI in November will be the same as that of the previous month, the 1.5% increase actually exceeded the market expectation. The seasonal rebound in food prices has become the main cause. Yu Qiumei, senior statistician of the Urban Statistics Department of the National Bureau of Statistics, pointed out that bad weather is the main reason for the higher than expected increase in food inflation. “The rainy and snowy weather in the northern region in November affected the production and transportation of fresh vegetables and fresh fruits, and the prices of fresh and fresh fruits. The total impact of the CPI rose by 0.12 percentage points." In addition, the steady increase in the consumer price of the service industry is also an important factor in the rise of the CPI. In the eight categories of commodities, the prices of commodities such as tobacco and health care have been eye-catching this year, replacing the food-leading gains.

Affected by the price of commodities such as petroleum processing and non-ferrous metal smelting, the PPI has set a new record of 45 consecutive months of struggle in the negative range. Yu Qiumei pointed out that the price decline of some industrial sectors expanded in November, among which non-ferrous metal smelting and rolling processing, non-ferrous metal mining and mining, and ferrous metal mining mining prices fell by 3.2%, 1.7% and 1.3% respectively, respectively, which was expanded from last month. 2.2, 0.8 and 0.6 percentage points. In addition, the price of petroleum processing fell from the previous month, from 0.2% in the previous month to 1.9% in the current month.

The Beijing Business Daily reporter found that after entering the second half of the year, the difference between the CPI and the PPI scissors continued to widen, approaching 8 percentage points, setting the biggest gap since 1994, and this deviation from the situation has yet to be bridged. The latest gap is 7.4 percentage points. Some experts pointed out that although the slight increase in CPI growth rate has increased the difficulty of monetary policy, it is not enough to form a constraint. The deflation risk formed by the divergence of CPI and PPI is the main contradiction.

Market enterprises are under pressure
The continued divergence of the two economic data not only releases the deflationary signal, but also means that the real economy is under constant pressure. Cao Fengqi, director of the Center for Finance and Securities Research at Peking University [microblogging], said that the CPI increase was flat and consistently in the "1 era", indicating that the current CPI is in a stable period, but it is worth noting that lower inflation The level reflects some deflationary tendencies, reflecting the tendency of residents to consume more conservatively. Finance columnist Xiao Lei also pointed out that the factors affecting inflation data are commodity prices and government tax reduction policies. CPI growth momentum is obvious before commodity prices such as crude oil (37.46, 0.30, 0.81%) have not stabilized and government tax policies have not been increased. insufficient.

The consumption of residents is under pressure, and the days of industrial enterprises are not good. While the Industrial Purchasing Managers' Index (PMI) and PPI are struggling at historical lows, product sales are also tight. "The market is now facing a serious oversupply, so industrial commodity prices have been compressing, and corporate costs and benefits have continued to decline." Chen He, director of the Institute of Industrial Economics at Capital University of Economics and Business, said.

The rise in CPI and the decline in PPI reveal that the current market supply and demand contradictions are prominent, the industry profit space is further narrowed, and market price shocks are intensifying. After all, the reduction in production demand ultimately led to a reduction in market demand. On the whole, the expansion of CPI and PPI scissors has increased the possibility of showing signs of deflation in the market, adding new “difficulties” to China’s economy, which has long assumed downward pressure.

Going to the stock arrow on the string
To avoid the "trumpet" of industrial CPI and PPI getting bigger and bigger, it is crucial to stop the decline of PPI. In the context of the overcapacity of heavy chemical companies, it is imperative to resolve inventory. Many organizations warned that if the surplus situation continues to spread, not only the difficulties of traditional industrial enterprises will increase, but also the financial and financial risks will be further highlighted. In addition, the resources occupied by overcapacity enterprises will make the cost of manpower, capital and land high, and hinder the development of the new economy while lacking effective output. "Resolving production capacity can be done from two aspects. First, encourage enterprises to participate in international competition, and go to the international market to find the sales of surplus products." Chen and told the Beijing Business Daily reporter, "At the same time, increase the intensity of domestic demand, in the hope that the domestic market can Actively alleviate some of the contradiction between supply and demand."

Zhu Baoliang, director of the Macroeconomic Forecasting Division of the National Information Center, stressed that ensuring the delisting of “zombie enterprises” is an important measure for the bottom industry. “Combining supply-side institutional reforms, urging mergers and acquisitions of enterprises or bankruptcy and delisting, so that they can Enterprises are bigger and stronger in their main business, which is the goal that should be targeted in the future."

At the State Council executive meeting held yesterday, Li Keqiang also made arrangements for the strict control of overcapacity industries. Specifically, it is required to shut down and transfer or reorganize overcapacity enterprises that do not meet the national energy consumption, environmental protection standards and long-term losses, and adopt asset restructuring and property rights for enterprises that have sustained losses for more than three years and do not meet the structural adjustment direction. Transfers and other methods will be "cleared out", cleaned up and disposed of "zombie enterprises", and by the end of 2017, the loss of operating loss-making enterprises will be significantly reduced.

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