中國現在還有另一個令人頭痛的問題：無法阻止通貨緊縮

Recently Yahoo News on-line reported the following:

China has another massive headache now: It can’t stem deflation

Laura He, CNN

Mon, December 11, 2023 at 5:47 p.m. GMT+8

While many central banks around the world are still trying to cool inflation, China is grappling with falling prices.

The Consumer Price Index (CPI) dropped 0.5% in November on an annual basis, the biggest fall since the depths of the pandemic three years ago, according to data released by China’s National Bureau of Statistics on Saturday.

The drop marked an acceleration in the rate of deflation from October, when the CPI fell 0.2% from a year earlier, and prompted calls for urgent action from Beijing to boost demand and prevent a downward spiral of prices.

The data come days after Chinese policymakers vowed to strengthen fiscal and monetary support to boost the world’s second biggest economy, which is struggling with a real-estate crisis, high youth unemployment and subdued consumer confidence.

China has been fighting weak prices for most of this year due to the property market slump and weak spending. Deflation is bad for the economy because consumers and companies may put off purchases or investments in anticipation of prices falling further. That in turn could further slow the economy, and create a vicious cycle.

Consumer inflation began slowing in February and turned negative in July for the first time in more than two years. It returned to positive territory in August and was flat in September, but fell back below zero in October.

“China’s deflation situation is deepening with the triple whammy from domestic food prices, international oil price corrections and weak domestic demand,” analysts from Citi said in a Sunday report.

“Signs of price weakness are now spreading from goods to services,” they added.

Food prices were a major drag on the CPI, down 4.2% in November from a year earlier. In particular, pork prices plummeted 31.8%.

Gasoline prices declined after international oil prices hit their lowest level in months in November.

Services inflation also slowed. It was up just 1% from a year ago last month, compared with a 1.2% increase in October.

The Producer Price Index (PPI), which is mainly driven by prices of commodities and raw materials, dropped 3% in November, down for 14 months in a row.

More stimulus needed

The worsening deflationary pressure has cast further doubt over China’s economic recovery.

“There is no time for policy hesitation to prevent a vicious loop between deflation, confidence and activities,” the Citi analysts said.

Late last month, Pan Gongsheng, the governor of the People’s Bank of China, said in Hong Kong that China would keep monetary policy “accommodative” to support the economy, and expected consumer prices to rise in the coming months.

On Friday, China’s top officials convened for a Politburo meeting and vowed to do more to expand domestic demand and spur consumer spending.

The Politburo meeting, along with the annual Central Economic Work Conference (CEWC) that is expected later this month, typically sets the tone for economic policy for the coming year.

Investors are awaiting for more details from the CEWC about economic policy for next year, the Citi analysts, adding that they expect “imminent” cuts to the reserve requirement ratio — the amount of money banks must keep in reserve — and interest rates.

 Translation

儘管全球許多央行仍在努力抑制通膨，但中國正努力應對物價下跌的問題。

中國國家統計局週六發布的數據顯示，11月份居民消費物價指數（CPI）年減0.5%，創三年前疫情嚴重以來的最大降幅。

這一下降標誌著通貨緊縮率自10月份以來有所加速，當時CPI較上年同期下降0.2%，並促使人們呼籲北京採取緊急行動來刺激需求並防止價格螺旋式下降。

這些數據, 是在中國政策制定者誓言加強財政和貨幣支持以提振世界第二大經濟體之幾天前發放，該經濟體正面臨房地產危機、青年失業率高企和消費者信心低迷等問題。

由於房地產市場低迷和消費疲軟，中國今年大部分時間都在與疲軟的物價作鬥爭。通貨緊縮對經濟不利，因為消費者和企業可能會因預期物價進一步下跌而推遲購買或投資。這反過來又可能進一步放緩經濟，形成惡性循環。

消費者通膨從2月開始放緩，7月兩年多來首次轉為負值，8月份恢復正值，9月持平，但10月份回落至零以下。

花旗分析師在周日的報告中表示， “受國內食品價格、國際油價調整和國內需求疲弱的三重打擊下，中國的通貨緊縮局勢正在加深。”

他們補充說： “價格疲軟的跡象現在正從商品蔓延到服務。”

食品價格是拖累CPI的主要因素，11月份較去年同期下降4.2%，其中豬肉價格下降31.8%。

國際油價在11 月觸及幾個月來的最低點後，汽油價格下跌。

服務業通膨也放緩，上個月僅比去年同期成長1%，而10月份的增幅為1.2%。

主要受大宗商品及原物料價格拉動的生產者出廠價格指數（PPI）11月份下降3%，連續14個月下降。

需要更多刺激

通貨緊縮壓力的加劇讓人們對中國經濟復甦進一步產生懷疑。

花旗分析師表示： “現在沒有時間去在政策上猶豫以防止通貨緊縮、信心、和經濟活動之間的惡性循環。”

上個月末，中國人民銀行行長 Pan Gongsheng 在香港表示，中國將保持「寬鬆」的貨幣政策以支持經濟，並預計未來幾個月消費者物價將上漲。

週五，中國高級官員召開政治局會議，承諾採取更多措施擴大內需並刺激消費支出。

政治局會議以及預計本月稍後召開的年度中央經濟工作會議（CEWC）通常會為來年的經濟政策定下基調。

花旗分析師表示，投資者正在等待 CEWC 提供有關明年經濟政策的更多細節，並補充稱，他們預計存款準備金率（銀行必須保留的存款金額）和利率將「即將」下調。

So, while many central banks around the world are still trying to cool inflation, China is busily dealing with falling prices. Some experts believe that China’s deflation situation is deepening. Investors are expecting “imminent” cuts to the reserve requirement ratio and interest rates. It seems that China has successfully created a socialistic economic system that performs differently and insulated from the free world.