Jpmorgan Predicts That China'S Consumer Prices Will Rise By 3.2% This Year

According to the latest forecast of JPMorgan Chase, China's consumer price index in 2010 will peak at about 4% in July or August, and prices will rise by 3.2% on average throughout the year.

Li Jing, chairman of JPMorgan China Securities and Commodities, said at the "JPMorgan China Investment Forum CEO Roundtable Forum" held in Beijing on the 10th that the Chinese government has a low tolerance of consumer price inflation, which is generally around 3%. If this level is exceeded, the probability of interest rate increase will be greatly increased. In April, China's consumer price inflation accelerated to 2.8% year on year, while producer price inflation exceeded market expectations, reaching 6.8%. In recent months, the force driving up the price index has shifted from rising food and resource prices to spending on housing, entertainment and education. According to the latest forecast of JPMorgan Chase, China's consumer price index in 2010 will peak at about 4% in July or August, with an average annual increase of 3.2%.

Li Jing said that the golden age of labor force in China's processing enterprises has passed, and the increase of labor cost is an important factor in promoting China's economic transformation. Recently, the income of employees in some enterprises along the southeast coast of China is increasing significantly. With the increase of Chinese residents' income, China's consumption growth prospects are promising in the next decade.

Looking ahead, Li Jing said that in view of market concerns about the uncertain economic outlook in Europe, it is expected that raw material price inflation will slow down. As the current inflation is approaching 3%, the one-year real deposit interest rate has become negative 0.55%. In view of the government's ability to adjust the monetary environment by using economic management tools other than interest rate adjustment, China has kept interest rates unchanged since the end of 2008.

Li Jing believes that the uncertainty caused by the European sovereign debt crisis may slow down the pace of the Chinese government's tightening policy, delay the interest rate adjustment and prudently introduce more radical administrative control measures.

Liang Xinjun, Executive Director of Fosun International, the largest private comprehensive investment group in China, believes that this round of financial crisis can profoundly and comprehensively adjust the global development model and usher in rapid growth for the global economy in the next decade. China's economy is undergoing a strategic transformation. Its economic growth will be driven mainly by exports and investment and will be driven mainly by consumption. The accelerated transformation of China's economic growth mode will usher in the next golden decade for China.