Analysis Of Characteristics And Reasons Of Recent Two Times CPI Increasing Of China

Since21st century, the China CPI increase over3%has been appeared for three times.The first time was from the ending of2003to the beginning of2005. The second time wasbetween March2007and October2008. And the latest one was during the period betweenJuly2010and May2012. As to the recent two times，the second and latest time，the increasingof China CPI was with the characteristic of persistence，long term，large magnitude andperiodic happening.The recent two times CPI increase was targeted for the investigation of this paper. By theanalysis of CPI structure，the connection between CPI and PPI，the relationship of materialsupply and demand，money supply and international surroundings，the characteristic andcause of CPI increasing in recent two times were illuminated. Besides，the difference betweenthese two times CPI increasing was also compared.By mainly taking quantitative analysis，and combining qualitative analysis，the detailedresearch about the CPI increasing in recent two times has been performed in this paper. Theresult revealed that，with respect to the second time of CPI increasing (March2007to October2008)，the main reason was the shortage of meat and egg food supply. The shortage of meatand egg food supply caused the rise in price，which resulted in the price rise of other items.Long-term and strong shortage of meat and egg food supply caused the continuous and largeCPI increasing. As to the latest time of CPI increasing (July2010to May2012)，the reasonoriginated from the price rise in foodstuff and fresh vegetable. Although the supply anddemand of foodstuff and fresh vegetable was basically stable，the high cost and large moneysupply led to the price rice in foodstuff and fresh vegetable. The CPI increasing in the secondtime was larger than the latest time. In conclusion，the food price is the solid foundation ofwhole price level. The precondition and main measures for price control in China is tovalorize food price.The CPI increasing caused by the shortage of food supply is seriously larger than the CPIincreasing caused by cost inflation and money supply increasing. Therefore，in case of largeCPI increasing caused by food price rise，measures should be taken to stabilize food supplyand valorize food price before implementing stimulative economy plan.