The National Bureau of Statistics announced June inflation data of 2.5%, with an average of 1.7% from January to June. When global inflation is in full swing, China's low inflation is hard-won. On the one hand, the skyrocketing prices of commodities have been effectively digested. It has suppressed the vicious price increase of coal, etc. On the other hand, the supply is sufficient, both in agricultural products and consumer goods, which has effectively resisted imported inflationary pressure. It is the only one in the world. However, high inflation in Europe and the United States has become more and more intense. Running towards hyperinflation, it is difficult to see the turning point of inflation in a short period of time. The only way is to continue to raise interest rates and wait for inflation to rise stubbornly and then fall back.
Inflation in South Korea, China's close neighbor, reached 6% in June, which is high inflation among China's neighbors. Although South Korea has many ways to reduce inflation with the help of China, South Korea's export-oriented economy is easily affected by high inflation in Europe and the United States, especially in energy. The impact of the surge has had a great impact on South Korea, but fortunately it is a close neighbor to China. In critical moments, it can urgently import from China. South Korea has finally been able to avoid the haze of hyperinflation in Europe and the United States. This can be regarded as a typical example of China's economic spillover effect in the Greater China Circle. For example, China is not only able to control inflation itself, but it can also effectively spill over to neighboring countries in times of emergency.
However, high inflation in Europe and the United States still has inertia. Although the Federal Reserve has raised interest rates to 1.75% and quickly returned to conventional interest rates, the high inflation in the United States has still not eased. The inflation in the Eurozone is almost the same as that in the United States. In Europe, the United States and the United Kingdom, The road to high inflation is slipping into the abyss step by step. Hyperinflation is likely to arrive sooner or later. At that time, the United States, Britain and Europe will have no other options. On the one hand, they are counting on central banks to accelerate interest rate increases, and on the other hand, they are counting on the global energy and commodity situation to slow down. However, this is actually not a good strategy. In the context of the fighting between Europe, the United States and Russia, high inflation in the United States, Britain and Europe will continue to rise stubbornly.
Inflation in some countries such as Turkey is almost out of control, reaching 78.6%. It can no longer be described as hyperinflation. If it continues to evolve, it is likely to lead to economic collapse. There are many such examples in emerging market countries. These countries are facing energy prices. Under the negative impact of skyrocketing inflation and high inflation in Europe and the United States, there are no effective measures to control inflation. For example, Brazil had a bumper grain harvest but still reached double-digit inflation. This cannot be completely solved by one country and requires global joint efforts. In this difficult situation, China's low inflation is even more valuable.
Commodity prices have begun to plummet recently, and crude oil prices have also loosened. There is a rare glimmer of hope in the global high inflation situation. With the convening of the G20 meeting, some global joint governance plans have been introduced one after another, which is expected to truly and effectively alleviate the global high inflation pressure. Once global high inflation reaches an inflection point, it will be a very valuable opportunity without triggering an economic recession. This prospect is not impossible, but the probability is small. The key is that the endless legal battle between the United States, Europe and Russia will stimulate the world economy to worsen. Rather than changing in a good direction, the main priority is still to prevent high inflation.
China has the opportunity to face the decline in global commodity prices and the ability to control the rise in oil, gas and energy prices. With a glimmer of hope in the global high inflation situation, China has more room to maintain low inflation and safeguard people's livelihood and well-being. Once the global situation If it really improves, it is entirely possible for China to withstand the impact of high inflation. Such a probability is still relatively high at present. It is good news for the macro economy and the Shanghai and Shenzhen stock markets, and will help China achieve its established goals of economic growth and achieve economic spillovers. The effect is a positive stimulus to the global economy and contributes China’s wisdom and strength.
