Stabilizing prices crucial to macro economy
China Daily

Customers buy vegetables at a supermarket in Mengzi, Southwest China's Yunnan province, May 11, 2022. Photo/Xinhua

Since the beginning of this year, some unexpected changes such as the complex evolution of international geopolitics and the emergence of a new round of domestic epidemics have had an impact on the Chinese economy, and the downward pressure has further increased.

At present, global inflation is on the rise. It is largely the less-developed countries that are paying the bill. In many emerging economies, the inflation rate has exceeded 10 percent, and in a few countries it has even exceeded 50 percent.

Given its close connection with the world economy, the increase of international commodity prices will expose China to mounting imported inflationary pressure. This effect is already evident in the May data. Gasoline, diesel and liquefied petroleum gas prices, for example, rose 27.6 percent, 30.1 percent and 26.9 percent year-on-year, respectively.

Despite this, China's overall price level remains stable, thanks to its effective macro control, which stresses restructuring the economy, boosting innovation and creating jobs.

In terms of supply and demand, China's economy is highly resilient. It has a large market space and a rich policy toolbox, as well as an abundant supply of industrial and agricultural products and services.

But although there will be no across-the-board inflation, policymakers must continue to attach great importance to ensuring a stable supply of food and energy, which is crucial to stabilizing prices and preventing inflation.

It is suggested that the country accelerate the release of the domestic coal production capacity in response to the rise of oil prices.

Also, it needs to facilitate logistics and ensure the smooth transportation and circulation of key commodities and industrial raw materials to maintain the stability of industry and supply chains. More also needs to be done to support micro and small enterprises and individual businesses so that they can weather through the temporary difficulties created by the COVID-19 epidemic. They are key job makers that concern the livelihoods of many people in need.

Keeping prices stable is related to the vital interests of thousands of households and the overall situation of economic and social development. Unstable prices will seriously disrupt market expectations and even the entire economic order, and even affect social stability. To keep the economy operating within a reasonable range, supporting measures are necessary to stabilize prices.