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Outstanding issues in economic life deserve due attention (2) |
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16:15, August 14, 2007 |
A steady rise in consumer price index (CPI) since early this year has provoked the extensive social concerns. To date, in term of total social supply and total demand, however, there are no conditions available for a widespread, sustained rise of commodity prices. In recent years, the short supply of heavy and chemical materials have been shifted to the surplus, and the strained situation with coal, electric power and oil and transport sector has ended in the main and the increase range for the price of the means of production also inclines to drop.
Factory price of industrial products rose 2.5 percent in June. Buying pries of raw materials, fuels and power supply went up 3.4 percent, 1 and 3.2 percentage points higher than a year ago respectively.
Foodstuff prices rose 7.6 percent in the first half of this year, and foodstuff prices contributed 2.5 percentage points to the CPI rise in the January-June period and, with the deduction of an impact from the food price rise, the CPI in China, nevertheless, merely increased by 0.7 percent. The current food price rise occurs at the time when China's agriculture is amid its sound, normal development. According to the preliminary estimation, the total output of summer grain is expected to rise 1.3 percent, representing four straight years of good harvest, following the three consecutive years of good yields from 2004-2006.
The present food price rise is owned chiefly to the following short-term reasons:
First, the price on the world food market is rises owing to the decreased global food output coupled with the efforts of the United States and other major grain producers to list maize as a biological energy material;
Second, the domestic cereals departments do not replenish their stock timely so as to cope with changes on China's grain market;
Third, China has been increasingly promoting the use of ethanol-enriched petrol for motor vehicles and;
Fourth, it has something to do with an impact from the traditional spring festival, or the Chinese lunar new year, and a couple of seasonal factors. From a long-term point of view, the rise in the prices of farm produce and food price also reveals the general characteristics of economic development. With a steady rise in the industrialization, urbanization and an increase in the income for residents in the course of economic development in any country, there is always a trend in the gradual rise in the farm produce and food price, which is the confirmation of the market on the shrinkage of land and the increasing hike in the cost of labor forces.
Overall, the increase of China''s consumption prices not only calls for active measures taken to ease the pressures on the price rise of meat and eggs, but also for the recognition that the present inflation rate is at a fairly low level. Based on the core CPI (with the deduction of the prices of energy and food) in wide use internationally, this index is merely 0.9 percent in China from January to June of 2007.
Along with the fast economic growth, the resource environment price for China's economic development has been too costly and dearly. In the first six months of the year, the increase range in the use of electric power for heavy industries and for general use socially was higher than in the same period a year ago, and the notorious water pollution in the Taihu Lake in east China and elsewhere in the country can even affect social security. So the resource environment has increasingly become the most eminent factor to restrict economic development.
At present, or in a dozen-year period ahead, China is at the era of accelerating the process of its industrialization and urbanization. On one hand, new demands have set forth for improving the quality for living environment and, on the other hand, demands on various types of resources and the release of pollutants have also continued to rise, and all these phenomena have aggravated contradictions between economic development and the resource environment.
To deal with these contradictions, central Chinese authority has already mapped out its work arrangements for conserving energy and reducing pollution, in strict compliance with requirements for the implementation of the scientific concept of development and goals set forth in the 11th five-year program (2006-2010). As long as the blue print of the central authority is carried out to the full with the national genuine, sustained and positive effect will surely be achieved in this regard.
By People's Daily Online
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