Analysis And Research On Current Price Fluctuation And Countermeasures In China

From October 2003, a countrywide rising trend for crops price appears. From January to September in 2004, the general price level has risen accumulatively to 4. 1%, which reaches the amplitude peak since 1997. Price fluctuation may affect people' s life, enterprises operation and economy running. Therefore, the price trend becomes the focus at present. However, the current price rising has its own characteristics. The price fluctuation does not show a trend of continuous rising in general price level, but reveals some structural characteristics. The price fluctuation causes arguments on estimation of inflation and the development of economy. Therefore, the thesis is researching basing on the reasons, level and effects of the price fluctuation and giving explanations through theories and reality analysis.First, the thesis analyzes the retail price index (RPI) and consumer price index (CPI) from January to September of 2004 and the variance of different kinds of products. It shows that prices of crops, productive materials and dwelling are rising obviously. While the price of clothing, domestic appliances and transportation are lowering. Then, the thesis researches the main reasons of the price fluctuation from currency support, demand, cost, economic structure, the economy period and international transmission. According to the statistic and analysis, the conclusions are as follows: The currency support at present is reasonable, and the price fluctuation is mainly caused by demand, cost, economic structure and the economy period. From year 2003, the economic period is entering the ascending part, and the economy develops quickly, the general demand is increasing, which will cause the upward trend for general price level. Since the dependence of international trade is greater recently, the price fluctuation is also affected by international transmission. In conclusion, the price fluctuation is caused by the price rising of crops, productive materialsand dwelling. It reflects the fact that China is now walking into the ascending part of economy period and is effected by international marketing prices.Basing on the above-mentioned analysis, the thesis makes further research on the effects of the price fluctuation in the fields of marketing economy, resources consumption, currency running, people' s life and enterprises operation. Following is the conclusion. First, the continuous price fluctuation will destroy the balance of market supply and demand. The serious price fluctuation may cause economy shrink and mess of commodities circulation. Second, it may cause the excessive production and the waste of resources. It is harmful to the lasting development of economy. Third, the continuous price fluctuation will bring negative effects on currency and finance. It is impossible for the currency to play the role of saving, paying and circulating. Fourth, it affects people' s life directly. It will cause people' s adjustment on saving and consuming or cause unemployment and an unstable society. Fifth, under the condition of price increasing in raw materials and fuels, enterprises are facing the difficulty in cash flow and lower margin or even loss. It will increase the cost of enterprises and make it unavailable for the exporting enterprises to commit their contracts.Because of the above reasons, the thesis submits the suggestion on price settlement. First, settle the price of crops by forecasting the demand of crops, encouraging the development of agriculture, adjusting the supply and demand of crops and improving the profit of agriculture. Second, by strengthening the social standards of raw material producing enterprises and reforming the resources compensation to settle the price of resource and raw material. Third, settle the price of dwelling by strengthening the macro-control of real estate and bettering its risk management. Fourth, controlling the scale of investment by perfecting and adjusting industrial policy and guiding the investment directions.The price flustuation is not only affected by demand and cost,- but also the economic structure. The supply of currency is not out of control at present. But the continuous price fluctuation will also cause negative effects on economy. Basing on the condition of structural price fluctuation, policies shall be tight to the fields of overheat parts and construction in lower standards, but support the development of agriculture, transportation and environment protection.