The Overheated Economy Is The First Sign Of &Nbsp; Monetary Tightening Or "Dual Prevention".

According to the latest data released by the National Bureau of statistics, GDP did not continue to decline quarterly by the fourth quarter of last year. Instead, it achieved year-end reversal, rising from 9.8% in the three quarter to 9.8%, showing strong growth momentum. It also indicates that the risk of overheated economy is increasing, and the policy is indeed necessary to tighten up.

Because this year is "

In December last year, the retail sales of social consumer goods increased by 19.1%, and the growth rate of industrial added value reached 13.5%, which exceeded 0.4 and 0.2 percentage points in November respectively.

As a large number of affordable housing in the fourth quarter is in the construction stage, 4 trillion economic stimulus projects are coming to an end. Investment in fixed assets in cities and towns has maintained a high growth rate, with a cumulative growth of 24.5%.

The author believes that the fall of CPI in December last year is the result of the government price intervention policy and the impact of the tail factor on the return to zero, which is a short-term phenomenon.

In the long run, inflation has become the main risk facing China's economic operation in 2011.

On the one hand, domestic inflation pressure is still not released, labor wages rise, productivity gap narrowed, credit and money expansion and other factors continue to exist; on the other hand, international grain prices and oil prices continue to rise, and import inflation pressure is also increasing.

In view of the strong demand for pre holiday food, vegetable prices rebounded and food prices rose overall.

The author predicts that in January, CPI will reach a new high, probably not less than 5.5%, and the average CPI will reach 5% in the first half.

Along with a series of regulatory policies and the second half of the year, the inflation trend will be higher and lower in 2011. It is estimated that the annual CPI or over 4.5% will be higher than 4%.

In December last year, new loans increased by 480 billion 700 million, and M2 increased by 19.7%.

In 2010, new RMB loans increased by 7 trillion and 950 billion yuan, which was higher than the 7 trillion and 800 billion target raised by the central bank earlier.

Exuberant demand is the main reason for faster loan growth.

As of January 19th, new loans by financial institutions had exceeded 1 trillion.

According to the report, the annual credit rating approved by the regulators is around 7 trillion. If the new loans of regulators do not exceed 12% of the annual credit target in January, the total credit limit will be around 840 billion in January.

In just 20 days, this indicator has been easily broken.

The author believes that more stringent monetary tightening measures are necessary to prevent credit expansion too fast.

In December last year, exports grew by 17.9% over the same period last year, and imports increased by 25.6% year-on-year. It is worth noting that the rapid growth of imports is partly due to the increase in prices of raw materials and other imported products, which indicates that the inflationary pressure of imports has increased.

In December, total imports amounted to 141 billion 70 million US dollars and total exports amounted to US $154 billion 150 million, reaching the highest level respectively.

As imports grew faster than exports, the trade surplus narrowed to $13 billion 80 million.

Exports increased by 31.3% year-on-year, and imports increased by 38.7% compared with the same period last year. The trade surplus was 183 billion 100 million US dollars, a decrease of 6.4% over 2009.

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The author expects to observe the strong demand for domestic consumption, and import will become a new high.

Foreign trade is expected to be stronger this year, but the trade surplus will further narrow.

As the US economy may be better than expected, China's economic growth is optimistic and RMB capital account liberalization is accelerating, the cumulative appreciation of RMB will exceed 5% in 2011.

In the 70 major cities, housing prices rose 0.3% in December last year, up 6.4% over the same period last year.

The year-on-year data show that the growth rate of house prices gradually declined after April last year.

From the link data, 1 to April housing prices rose by an average of 1.18%, after four months, although the ring price has increased, but the increase has narrowed sharply.

This shows that speculative demand in the real estate market has been restrained to a certain extent, and the real estate market is gradually under control.

It is the main keynote of this year's real estate market to push forward the construction of affordable housing projects such as public rental housing on a large scale, to implement and improve real estate regulation policies, and resolutely curb housing prices rising too fast.

The government has already suppressed the speculative demand of real estate as a priority factor for policy choice, and has sought to ensure that the pressure of rising housing prices will be eased under the overall situation of supply.

With the coming of the new round of interest rate cycles, the gradual introduction of the real estate tax and the construction of more affordable housing, housing prices will further stabilize in 2011, and real estate prices will fall by more than 5% in 2012.

China's economy is moving into the era of "high growth, high inflation".

How to maintain rapid economic growth and stabilize inflation expectations is a major challenge for policymakers in 2011.

Under the keynote of active fiscal policy, fixed asset investment, especially government investment, needs to be supported by a modest fiscal deficit. It is estimated that the annual fiscal deficit may exceed 900 billion of the government's target.

On the other hand, I believe that inflation is not only a short-term problem, but rather a long-term trend.

The sooner monetary policy tightens, the more effective it is to fight inflation.

The increase in the deposit reserve ratio is more direct than the increase in interest rates, but it is not as effective as raising interest rates.

Therefore, it is also good to raise interest rates as early as possible. It is estimated that this year's interest rate increase will exceed market expectations, and at least 100 basis points will be raised before the end of the year.