China Faces A Major Asset Bubble Problem, &Nbsp; Excessive Currency Issuance.

In September 19th, the central bank monetary policy Former members of the committee, national economy Fang Gang, director of the Institute, in 2010 (fourth th) China CEO The annual meeting said that China would not see such a large inflation in 2007 ~2008, because food prices will not rise as high as in 2006 ~2007.

"Daily economic news" found that the quarterly survey results released by the central bank on the same day showed that the proportion of residents who felt "high and unacceptable" in the third quarter decreased slightly compared with the previous quarter, but the number of residents expected to increase prices in the future has increased.

But Fang Gang pointed out that the most serious problem facing the Chinese economy is the prevention of asset bubbles.

Fang Gang said that China is different from that in 2006 and 2007, when the world financial bubble was at its peak, and that the supply and demand of the market was relatively balanced, and that more money was injected into the market, and asset market prices were easy to bubble. Now, the global financial bubble has broken down, and since last year, there has been some shortage of domestic fixed asset investment in specific product areas. In this case, it is not easy to raise the price of manufacturing products.

But he said that the thrust of China's inflation this year is food prices. However, unlike world food prices in 2007 and 2008, which led to higher feed prices, world food prices are still at a low level this year. "Although Russia has announced that it has stopped exporting grain for some time, the price of wheat in the New York futures market has risen by only 10%," he said.

Fang Gang believes that China's grain harvest for 6 consecutive years will not be too bad this year. In recent two months, prices of raw materials in China are decreasing, and there is little possibility of significant inflation.

According to Statistics Bureau, 1~8 CPI increased by 2.8% over the same period last year, while the growth rate was 2.7% higher than that of 1~7, but still below the annual growth target of 3%.

The central bank's quarterly survey showed that the proportion of residents who felt "high and unacceptable" in the third quarter fell slightly by 0.6 percentage points from the previous quarter to 58.3%, but the proportion of residents expected to rise in the future reached 46.2%, up 3.8 percentage points over the two quarter.

Fang Gang said that China issued 10 trillion of the currency last year. At the beginning of this year, the Chinese economy started to grow at a high level after steady economic growth. If not adjusted in a timely manner, the GDP growth rate will reach 11% this year, and the Chinese economy will tend to overheat.

"China now faces a major problem of asset bubbles. 10 trillion of the currency can easily raise prices and overheat the economy. Fang Gang said.

Fang Gang said that in the past 30 years, no economy in the world has been in crisis because of inflation, but it is all because of asset bubbles.

For high housing prices, Li Daokui, member of the central bank's monetary policy committee, also pointed out that the soaring housing prices had consumed the future economic growth space ahead of time, and reduced the attractiveness of big cities to young talents, which hampered the process of urbanization. At the same time, the mode of land sales by local governments is not sustainable, and the government must promote further reform of the public financial system.

According to the central bank survey, 72.2% of residents in the third quarter believed that housing prices were "too high to be accepted", a slight decrease of 0.3 percentage points from the previous quarter, but 7 percentage points higher than the same period last year. The proportion of residents who wish to buy houses in the next 3 months is 15.6%, which is flat with the previous quarter.