Gao Shanwen: Inflation That Can'T Be Stopped

On the basis of macroeconomic data in August, on the one hand,

On the level of economic growth, we can see that in August, the growth of industrial and power generation increased slightly, and imports accelerated.

This is reflected from the perspective of production law. In August, about 1/3 of industrial growth came from the direct contribution of the steel industry. If the thermal power industry was incorporated, half of the increase in industrial growth would come from the contribution of steel related industries.

From the perspective of expenditure law, the growth rate of fixed asset investment in August was mainly from the industries with strong background of oil and natural gas extraction, electricity and heat supply, and railway pportation. At the same time, the growth rate of real estate development investment increased by 1.1 percentage points in a single month, which may be related to temporary factors such as the progress of the construction of affordable housing.

However, the overall economic background is still at the end of the production cycle, and the trend of economic slowdown has not changed.

The year-on-year growth rate will not be bottomed out in the first quarter of 2011, and it will still run at a relatively low level of growth over the past ten years in 2011, for example, near 9.1%.

At the inflation level, consistent with previous expectations, the CPI growth rate continued to rise to 3.5% in August, with the main strength coming from the CPI food sector. Meanwhile, PPI's year-on-year growth has further declined to 4.3%.

The price increase in the agricultural sector should not be mainly attributed to the weather, which is understood as a short-term disturbance factor.

If ignoring the underlying labor shortage behind it and the trend that the economy is experiencing the turning point of Lewis, it will lead to a clear bias in the result of judgment.

In fact, the judgment of future inflation can be concentrated on two points.

First, the central axis level of China's CPI fluctuation will rise systematically, rising from the average level of 2% in the past ten years to 3%-4%. Second, due to the general stability of the PPI axis in the same period, there will be an obvious inflation gap between CPI and PPI.

A brief explanation is that as China's economy passes through the turning point of Lewis and the decline of the number of young and middle-aged labor force, the wage level of the low end labor force continues to rise rapidly, thus pushing the prices of high agricultural products systematically.

In fact, in many service areas, due to technological progress constraints, there will be continuing upward pressure on prices.

We should discuss inflation in a short term. As the price of meat and poultry has rebounded over the next year, the CPI will exceed the central level next year, for example, above 4%.

Understanding the main line of inflation is of great significance for policy orientation and tool judgement, and has an impact on capital markets such as stocks and bonds.

For example, the policy of increasing interest rates on deposits with negative interest rates and allowing deposit interest rates to float upward will raise the yield of short-term bond assets and may impact on the banking sector of stock assets.

Back to the short-term judgement of the capital market, for the stock market, under the condition of no inflationary pressure, the intensity of policy hedging is limited.

Taking into account investment, inflation and policy factors, it is predicted that the market will remain a big probability event, and the probability of market going up or down is relatively small.

Before the real estate investment falls to a low point (it is expected to happen in the two quarter of next year), the lack of trend investment opportunities related to the real estate industry chain, growth stocks, consumer stocks and stocks will continue to be active.

For the bond market, the relative stability of the credit policy and the main line of the rise of the trade surplus make the bank system abundant.

However, in the context of rising inflation, interest rate products are more vulnerable to shocks. Within the pure debt assets, there will also be different manifestations among the varieties.

But with the recovery of credit growth and the reflection of monetary policy on inflation, the outlook for capital market will gradually be adjusted negatively.

For the real estate market, the key factors are inventory and cash flow.

It is estimated that after the fourth quarter of this year, real estate inventories will increase significantly. At the same time, because of the freezing of financing channels for real estate enterprises, the investment activities of real estate enterprises will be greatly slowed down.

If the investment growth rate of the real estate industry is falling rapidly, it is bound to drive the growth rate of fixed asset investment to continue to fall.