The impact of rising prices on you.

Since the beginning of 2003, the overall level of consumer prices has turned from falling to rising, ending the continuous decline. Especially since October 2003, food prices have risen sharply, making the overall level of consumer prices in our district reach reached its highest level since 1998. After entering 2004, due to the poor harvest of agricultural products across the country and excessive investment growth, the overall price level rose rapidly, which caused the government and people to pay close attention to price changes. What are the new characteristics of the new round of inflation? What impact will price fluctuations have on the lives of residents in our district during the "Tenth Five-Year Plan" period? What are the underlying causes of price increases? What problems exist in the lives of urban residents in our district? What measures should be taken? This article will conduct a more in-depth discussion in order to provide some reference for the macro-control of government departments and the public to correctly understand and judge the price situation in our region and how to improve residents' living standards.

1. Characteristics of the new round of inflation

Taken together, inflation is a process in which the general price level continues to rise generally, that is, currency prices continue to fall or currency depreciates. process. This definition includes two main characteristics: (1) Inflation is a continuous increase in the overall price level, not a temporary or short-term increase in the overall price level, and its upward trend is irreversible. (2) Inflation is a general increase in the general level of prices, rather than price changes in individual goods or services.

my country now uses the consumer price index as an indicator to reflect the degree of inflation changes. Its survey content covers residents’ daily consumer goods and services, which can fully reflect the impact of changes in market factors on residents’ consumption. In addition, This indicator has been recognized internationally and has high international comparability.

Since 2003, with the rapid expansion of fixed asset investment, supply bottlenecks have appeared in raw materials, fuel and other means of production, and prices have risen rapidly. In addition, after October, food prices began to rise sharply in Beijing and even across the country, driving an overall increase in the overall level of consumer prices. This is very similar to the two severe inflations in the 1980s and 1990s that were preceded by rapid increases in the prices of some means of production and food. People are still worried about the impact of these two inflations on the social economy and people's lives. All sectors of society and government departments are paying close attention to price increases, and some even have doubts. So, what are the characteristics of this round of inflation that are different from the previous two?

1. This round of inflation is gradually developing from low to high

The market prices in our district started to rise at the end of 2002. The annual consumer price index of Changping Satellite City in 2002 for the same period The ratio was 98%, 98.5% in October 2002, 98.4% in November and 99.6% in December, all higher than the annual average. In 2003, the overall consumer price level began to turn from negative to positive, reaching 100.9% in January and 101% in February. The consumer price index for the whole year was 101.3%, showing a slight upward trend. In 2004, it entered a stage of accelerated growth. From the perspective of various price indexes from upstream commodities (referring to the production field) to downstream commodities (referring to the consumption field), there was an overall increase. In 2004, the overall ex-factory price level of industrial products in Changping District increased by 4.3%, the overall purchasing price level of raw materials, fuel, and power increased by 14.2%, and the overall consumer price level increased by 2.5%. In the first half of this year, the overall ex-factory price level of industrial products increased by 3.7%, the overall purchase price level of raw materials, fuel, and power increased by 14%, the sales price of housing increased by 9.8%, and the consumer price increased by 1.4%. Compared with the previous two serious inflations, this inflation is relatively mild. In the 1980s and 1990s, the inflation price index rose by 26.7% and 24.1%, setting a record since the founding of the People's Republic of China.

2. This round of inflation is moderate

On the one hand, from the perspective of the standard for distinguishing the degree of inflation, in developed countries, a price increase of less than 3% is generally defined as moderate inflation. Expansion has little harm to the normal operation of the economy. For emerging developing countries like my country, due to their rapid economic development, the upper limit of moderate inflation for developing countries is generally set at about 5%; on the other hand, it is different from the previous double-digit inflation in my country. Compared with the inflation rate, the degree of inflation this time is much milder.

Looking at the main indicators reflecting inflation, the overall level of consumer prices in our region increased by 1.3% in 2003, and only increased by 2.5% in 2004. If changes in food and energy prices are excluded, the increase would be even smaller. Judging from the year-on-year price increase in each month, although it has increased continuously in the past two years, it has not exceeded 3%, and there has been no accelerated upward trend. After entering 2005, there has been a downward trend. In the first half of this year, Changping consumer prices The overall level increased by 1.4%, and the ex-factory price of industrial products increased by 3.7%. Therefore, so far, this round of price increases is considered mild inflation.

3. This round of inflation has obvious structural change characteristics

There are large differences in price increases in different links from upstream to downstream, which is reflected in the fact that the price increase of primary products is higher than that of intermediate products. The price increase of products and intermediate products is higher than that of final products, and the start of the increase is delayed by 1 to 2 months. In 2004, the purchase price of raw materials, fuel and power in our region increased by 14.2%, which was 4.3% higher than the ex-factory price of industrial products. The 4.3% increase in the ex-factory price of industrial products was higher than the 2.5% increase in the consumer price.

There are also large differences in the internal composition of the price index in each link. For example, in the ex-factory price of industrial products, the ex-factory price of production materials increased by 6.8% in 2004, which affected the increase in the ex-factory price of industrial products by about 4.6 percentage points. During the same period, the ex-factory price of daily necessities fell by 0.6%, of which durable consumer goods fell by 6.5%. Among the eight major categories of commodities used to calculate the consumer price index, only five major categories: food, tobacco, alcohol and supplies, medical care, entertainment, education, cultural supplies and services, and residence increased. The food category with the highest increase increased by 5.9%, while the other three categories increased. Continued decline.

4. This round of inflation has obvious characteristics of phased changes.

Affected by national macro-control policies, grain prices and international crude oil market prices, the price changes of upstream and downstream products in our region show phased changes.

The ex-factory price of industrial products in our district began to rise in 2003, rising by 1.9% in the first quarter. Due to the rapid increase in international crude oil prices at that time, the price of industrial products in our district experienced an accelerated rise in the first quarter of 2003. process. As international crude oil prices gradually stabilize, the price increases for industrial products tend to level off. However, due to the resurgence of international crude oil market and steel prices at the end of 2003 and the excessive growth of domestic fixed asset investment, the price increase of industrial products expanded rapidly, showing a pattern of increasing month by month in the first half of 2004 and then slowing down in the last two months. The reason why the price increase of industrial products fell slightly month by month in the last two months was mainly due to the gradual emergence of the effects of macroeconomic control, the slowdown in investment growth, the sharp fall in international crude oil prices, and the stabilization of steel and non-ferrous metal prices.*** Same effect.

After turning from negative to positive at the beginning of 2003, consumer prices have been rising slightly. However, after grain prices rose sharply in the fourth quarter of 2003, consumer prices generally accelerated month by month until the first half of 2004. After rising, as grain prices fell back from highs, the price increase gradually slowed down. Judging from the main factors causing price increases, the price increases before the first half of 2004 were mainly caused by the rapid increase in grain prices, which in turn caused the increase in the prices of meat, poultry, eggs and other food products. Since then, although rising prices for water, electricity, fuel, transportation, etc. have become new driving forces for the rise in the overall price level, the rapid slowdown in food price increases has caused the year-on-year increase in consumer prices to drop rapidly from 2.5% in 2004 to 3% in the first half of this year. 1.4%.

2. The impact of rising prices on our region’s economy and residents’ lives

1. New changes have taken place in the price transmission mechanism

Under market economy conditions, Whether the price increase of upstream commodities can be transmitted to the downstream mainly depends on the supply and demand situation of the commodities, the elasticity of supply and demand and the length of the industrial chain. Generally speaking, industries with low elasticity of supply and demand and good connection between supply and demand should have more obvious transmission effects. On the contrary, in areas with oversupply or high elasticity of supply and demand, price transmission from upstream to downstream can only be achieved through changes in the supply and demand relationship over a longer period of time. However, most industrial consumer goods in Beijing and even the country are currently in oversupply, and the transmission process is obviously uncertain.

For example, in 2004, the purchase price of materials, fuel, and power in Beijing and even Changping Plain increased by 14.2% and has been running at a high level. As a result, the price decline of major durable consumer goods in the first eight months of 2004 showed a trend of shrinking month by month, showing a certain degree of conductivity. feature. However, due to intensified market competition, this trend stopped after entering the third quarter.

Since 2003, the prices of upstream products in our district have continued to rise, but consumer prices have not increased significantly. It is obvious that in the new economic growth cycle, the price transmission mechanism has undergone new changes.

2. The economic benefits of enterprises have been greatly affected

The price transmission of agricultural products is both fast and sufficient, and its supply is inelastic. In recent years, the country's agricultural products have been poorly harvested and there is a supply gap, which determines that the price transmission effect starting from agricultural products is very obvious. In 2004, grain prices in Changping District rose by 21.3%, causing food prices to rise by 5.9%, which in turn drove the entire consumer price to rise by 0.4 percentage points.

Because the price transmission of industrial products is both slow and insufficient. The price of raw materials for enterprises has increased significantly, and the price increase of industrial products is much lower than the increase of raw material prices, which has greatly reduced the profit margins of enterprises and undoubtedly made the production and operation activities of some enterprises more difficult; for farmers, agricultural production materials The rise in prices has offset the benefits brought by the rise in food prices; for residents, the rise in prices has increased residents' consumption expenditures, especially making the lives of low-income groups even worse.

3. Some residents are trapped in poverty

In 2004, the consumer price index in our district showed an upward trend, up 2.5% year-on-year. The overall level of consumer prices in 2004 was in line with the "Ninth Five-Year Plan" "In the final period, it increased by 3.8% compared with 2000. The overall level of consumer prices in 2005 is expected to increase by about 1.5% compared with 2004 and 5.4% compared with 2000. Food prices are expected to increase by 11.8% compared with 2000. The rising prices of commodities are mainly concentrated in grains, fats and oils, and meat, poultry, and egg foods, which naturally increase residents’ consumption expenditures and have gradually highlighted their impact on low-income families.

According to the household survey statistics of our district, in 2004, the per capita disposable income of the 20% low-income households in Changping urban residents was 4271.4 yuan, and the food consumption expenditure was 2182.7 yuan. The proportion of expenditure) is 50.1%, which is still at the stage of barely surviving, while the Engel coefficient of the 5% lowest-income families is 60.2%, and their lives are below the absolute poverty line. According to the survey statistics of the subsistence allowance in our district, in the first half of this year, the per capita disposable income of urban subsistence allowance families was 2,226 yuan, and the per capita monthly income was 371 yuan, which was only 27.7% of the per capita disposable income of Changping urban residents. With the rise in prices during the "Tenth Five-Year Plan" period in Changping, especially the rise in the prices of food, education, medical care, water, electricity and gas, the lives of low-income families in our district have fallen into trouble.

3. Reasons for rising prices

1. The new round of economic growth has objectively brought pressure on rising prices

Since 2003, Changping and Beijing The city's national economy has re-entered a stage of rapid development. In 2004, the economy maintained a good momentum of steady and rapid development. However, a new round of economic growth has brought pressure to rising prices. Looking back at the relationship between economic development and price changes since the reform and opening up, It can be seen that high economic growth will generally drive prices to rise rapidly, and the lagging impact will be more serious.

2. Supply bottleneck constraints have caused a substantial increase in production prices

my country is a country where a market economy has initially taken shape. There are still aspects of the economic structure that do not adapt to the development requirements of a market economy. It is highlighted by the obvious trend of heavy-duty economic structure. In the context of rapid investment and economic growth, basic industrial sectors such as agriculture, energy, and transportation are overwhelmed, forming new "bottleneck" constraints, which has caused price levels in these fields to rise. rise rapidly, and ultimately promote the rise of the overall price level of the whole society.

The neglect of agricultural production in the rapid economic development has led to a gap in food supply. In recent years, the real estate boom has led to a large amount of land being occupied. The area sown for food has been declining year by year. Coupled with the serious natural disasters, the food supply has been in short supply. The output is declining year by year, while the cost of growing grain is rising year by year, and the gap between grain supply and demand is expanding, which has caused the current round of sharp rise in grain prices.

IV. Main problems existing in the lives of residents in our district

1. The average salary level of on-the-job employees is low

In 2004, *** employees in Changping District There are 188,000 personnel, including: 15,000 in central units, 48,000 in municipal units, 58,000 in district units, and 66,000 in units without supervisors. In addition to 63,000 in central units and municipal units, 63,000 are in district units and There are 125,000 employees without supervisory units, accounting for 66.5% of the total number of employees in Changping. The per capita salary of these employees in 2004 was 15,512 yuan, and the per capita monthly salary was 1,293 yuan, which was 17.5% lower than the average salary in the region. And it is this Some people constitute the main body of urban residents in Changping District, and these people are mainly distributed in industrial enterprises, commercial enterprises, construction industries and other industries in Changping.

In 2004, the average salary in Beijing was 28,348 yuan and in Changping District was 18,796 yuan, which was 33.7% lower than the city's average salary, indicating that the overall salary level in Changping was low.

2. The income gap among residents has widened significantly

In 2004, the per capita disposable income of urban residents in our district was 12,279 yuan, of which the per capita disposable income of 20% of high-income households was 29,330.7 yuan, higher than 1.4 times the regional average. The per capita income of the 20% low-income households is 4271.4 yuan, which is only 34.8% of the district average. The ratio of high- and low-income households is 6.9:1. In 2000, the ratio of high- and low-income households in our district was 4.3:1. During the "Tenth Five-Year Plan" period, residents The income gap has obviously widened.

3. Low-income families live in poverty

In 2004, the per capita disposable income of 20% of low-income families in Changping District was 4271.4 yuan, of which food expenditure was 2182.7 yuan, and the Engel coefficient was 50.1%, which was still In the stage of barely surviving. 5% of urban households are trapped in poverty.

5. Suggestions

1. Do everything possible to increase employee income

Income is the most important factor in determining consumption, so the most important way to promote consumption is to continuously increase the number of residents The disposable income of residents and the increase in residents' income will effectively improve residents' income expectations, enhance confidence, reduce excessive savings, expand immediate consumption, and promote economic growth. Since the wage income of employees in our district is low and the economic benefits of enterprises are not high, the income of on-the-job employees should be increased to support the increase in residents' income. The government should implement employment priority and social security priority policies to improve the living standards of urban residents.

2. Increase poverty alleviation for low-income households

The government and relevant departments should pay more attention to vulnerable groups. On the one hand, they must improve social security and increase employment support for needy groups. And transfer payments, the payment of subsistence allowance subsidies is one aspect. At the same time, attention should be paid to solving the employment problem of laborers from low-income households. On the other hand, corresponding policies should be formulated to focus on solving the social problems of widening income gaps caused by the existence of illegal and unreasonable incomes, focusing on expanding the proportion of low- and middle-income people, and increasing poverty alleviation for low-income households to help them get out of poverty as soon as possible.

3. Improve the consumption environment, expand consumption areas, and update consumption concepts

The government’s economic management departments should shift from studying production and supply to studying consumption and demand, starting from the actual situation and focusing on Adjust the consumption structure from the institutional and policy perspective and activate different levels of consumer demand. Relevant departments should intensify their efforts to crack down on counterfeiting and shoddy behavior in accordance with the law, severely punish commercial fraud, promote and encourage "honest promotions", standardize market order, eliminate consumers' worries about purchasing goods, and safeguard the interests of consumers.

Production and business units should promote the diversification of industries, accelerate the development of the service industry, broaden the service field, vigorously increase the proportion of the added value of the service industry in the GDP, and vigorously develop information services, financial management services, leasing Services, community services, home personal medical services, etc. At present, service trade in our region is still in its infancy, and there are still many blank spots in the market, with huge potential and unlimited business opportunities.