China National Bureau of Statistics shows that in June, the residents' consumer price index (CPI) and industrial producer's factory price index (PPI) were weakened again.The year -on -year growth rate of CPI fell to zero, the first time since February 2021.PPI decreased by 5.4%year -on -year, a decrease of 0.8 percentage points from May to May, which is the sixth consecutive month. It is also the lowest since January 2016.

CPI reflects the price of downstream consumer goods, and PPI reflects the price of upstream industrial products.CPI and PPI dual, that is, the price of consumer goods and the price of industrial products dropped, which is attributed to the continued decline in the price of commodities such as coal and petroleum, but the fundamental factors are insufficient consumption and insufficient innovation power in the market.

The current situation of small demand in China forms a sharp contrast with most Western economies.The lower level of inflation in the performance of CPI has shot more and greater room for macro policies to grow, stable employment, and stabilize prices.The decline in PPI means that the decline in production costs for enterprises is conducive to improving profit margins and competitiveness.

But CPI and PPI downtime, the downturn in the consumer market, and the overcapacity of the manufacturing industry may cause economic shrinkage risks and do not take it lightly.

The economics community is recognized that shrinkage is more terrible than inflation, shrinking is more terrible than inflation, and shrinkage is more difficult than inflation.Therefore, there is a saying in the economy that "rather inflation should not shrink".The Great Depression in 1929, which made Europe and the United States, and the corresponding economic downturn and shrinking for more than ten years.Ten years ago, the shrinking ghost also wandered in the global market, and the economic recovery after the financial crisis was crawling like snails.

After experiencing the prevention and control of the epidemic in the Chinese economy, a short -lived economic rebound appeared, but many macro data since April, unexpectedly in an embarrassing situation of hovering and being fascinated by the tepidness, may be the economy may be the economy.The precursor of tightening must not be underestimated.

The National Bureau of Statistics of China predicts that the impact of international inputability in the second half of the year will continue, the domestic market demand is still recovering, and the price of some industrial products will continue in the short term.However, with the recovery of the domestic economy and market demand, the overall judgment, PPI is expected to gradually rise in the second half of the year.Most economists also believe that the probability of PPI's year -on -year decline has bottomed out, and it is expected to gradually narrow in the second half of the year.

However, considering that the external environment becomes more complicated and severe, it is necessary to fully estimate the uncertainty faced in economic growth in the third and fourth quarters, and attach importance to improving the effects of stability, stable growth, and expanding domestic demand in the adverse cycle policy.Among them, anti -Tong shrinkage should be the main policy direction.

At present, China is in a critical period of economic recovery and industrial upgrading, and structural problems and periodic contradictions are overlapping.Vigorously develop the real economy and find new growth points, and it is a wonderful plan for eliminating the risk of shrinking.

In the face of both CPI and PPI data weakened in June, the Chinese central government's brewing to launch a series of stable economic measures in a timely manner is already on the string.In fact, "promptly introduced", "hurry up", "more work", "reserve of policy measures", "reserves of policy measures", "maximize the comprehensive effect effects of policy", have always appeared in the executive meeting of the State Council of China.By the middle of 2023, a series of deployments released a strong signal that promoted the further recovery of the economy from the Executive Meeting of the State Council to the Economic Situation Expert Symposium.In the critical period of economic recovery and industrial upgrading, it is a top priority to introduce a group of more powerful and targeted policies and measures.

We firmly believe that under the regulations of a series of stable economic policies, even if there is a shrinkage, it will disappear in time.

The author is the writer of China Financial Media column, chief analyst of Jingsu Media