htmlOn October 14, China and the United States released CPI data almost at the same time. Both are large economies, , but the economic data of the two countries are very different.
Let’s first look at the data of the US. The US CPI rose 8.2% year-on-year in September, and the core CPI rose 6.6% year-on-year, setting a record high in 40 years. , while China's CPI data increased by 2.8% year-on-year.
China-US CPI comparison chart. The United States is 8.2%, and China is 2.8%.
Many people ask, why is China's CPI controlled so well? But the United States still has a high fever? Inflation remains high? This involves the differences in the economic policies of the two countries, which will have a great impact on ordinary people.
Today, we will talk about the differences and impact of CPIs between China and the United States. When you see in the end, you will gain something.
The reasons for different CPI in China and the United States
The reasons for the CPI in China and the United States have actually changed since the epidemic in 2020. In 2020, we achieved a preliminary victory in the fight against the epidemic, and the Chinese economy began to recover before the global economy, so there is no need for us to promote economic growth by flooding the market.
However, the United States is different. In order to save the US stock market and the real economy, the United States, which has been plagued by the epidemic for more than two years, has adopted a quantitative easing policy of "giant amount of money" in order to save the US stock market and the real economy. In just two years, Trump spent 4 trillion US dollars, and after Biden took office, he spent another trillion US dollars. The super-issued dollar first flooded the United States, and then overflowed to the world, bringing inflation .
Trump spent $4 trillion
Plus most developed countries around the world follow the policy of Feder , So the United States has inflation, and other countries have also experienced inflation, which has even become more serious due to geopolitical crises.
China has not flooded the market, so our CPI is better controlled. has been below 3%. Even if pork prices are soaring now, it has not exceeded 3%, while the highest in the United States is as high as 9.1%. This data makes Biden say "high is unacceptable."
US inflation rate is as high as 9.1%. Biden said it was "unacceptable"
The CPI at a high level has caused dire straits in the American people, and resident families have brought great pressure. Although Trump issued "cash checks" to many families during the previous period of the flood, he has returned them now. The actual losses and depreciation that Americans need to bear are much greater than the income from cash.
So a few years ago when the US government discovered cash checks, many people envied them, but have these people ever thought that the wool comes from the sheep, and The checks received by Americans will eventually be paid by them themselves.
Crisis is constantly emerging
When Americans are letting go, they did not expect that they would encounter so many troubles today.
is the financial market first. Since hike rate , the US stock market has collapsed to a certain extent. Nasdaq index fell 35% from its highs, and the stock prices of many large companies plummeted and halved, which is equivalent to looting the wealth of American residents.
Since the beginning of this year, the Nasdaq index has fallen 35% from its highs
followed by the collapse of the US bond market . The US bond yields we see are constantly rising, which is actually the performance of the bear market of US bonds . After all, the higher the yield in the bond market, the greater the loss , because no one buys and sells US bonds, which leads to the rise in US bond yields.
The third is the emergence of the US real estate bubble. You should know that the current US housing prices have fallen very hard, with the first decline in 10 years, and the decline has reached the level of the subprime mortgage crisis in 2008, which has caused Americans to be very panicked.
U.S. housing prices began to plummet
Fourth, which is the increase in living costs brought about by high inflation. According to survey data, 32% of Americans overpay their household bills due to income reasons, and 61% said they did not have enough money on hand and they were increasingly dissatisfied with the economic situation in the United States.
These problems did not happen a few years ago or even more than ten years ago. Only the global financial crisis in 2008 can be compared. Therefore, it is not too much to describe this year as a major change that has not been encountered in a century. The international situation is not the worst, only worse.
Chinese CPI has moisture
Let’s look at the domestic market. When we analyze CPI, we all said that there is moisture . This time the CPI does have moisture, and this moisture lies in the price of pork.
Judging from the domestic CPI data, if we exclude the price of pork increases , , then China's CPI is only 2.02% year-on-year, with almost no inflation. Even due to insufficient demand, China's core CPI has dropped by 0.2%.
Recently, domestic pork prices have risen rapidly
What problem does this reflect? If pork prices are well controlled, then China does not have to worry about inflation at all. Our economic situation is completely different from that of the United States.
On the contrary, we have to worry about the deflation caused by insufficient demand. In September, the PPI index, which reflects industrial production, showed a downward trend, which means that insufficient demand has led to a decline in the price index. and insufficient demand means that the company's order situation is not optimistic and subsequent development is constrained.
insufficient domestic demand and reduced orders are problems in China's economy. So you will find that the United States and China, as the world's first and second largest economy. The United States is desperate to raise interest rates to lower the inflation rate, and is worried about rising inflation every day.
But in China, it is completely the opposite. If it weren't for the seasonal rise in prices of pork and other foods, China's CPI would have been lower, So we have issued policies to reduce the reserve requirement ratio and interest rate cuts many times, and the mortgage interest rate has dropped from 6% to 3.9%, and we have tried every means to stimulate economic production and recovery.
Economy is the foundation, and the Chinese and American economies have begun to take completely different paths, which also means that many of our policies and plans will be completely different from those of European and American countries. We have our national conditions, and blindly following is not a good thing, and going our own way is the most important thing.
What are the differences in China and the United States’ policies, what impact will it have on us?
Economic policies need to be implemented. So what impact does analyzing the differences in economic paths between China and the United States have on ordinary people? How should we deal with it?
First of all, the US inflation crisis and the Federal Reserve's interest rate hike revealed a conclusion: The global economy will be extremely recession in the next 1-2 years. At this time, whether it is going abroad, doing business across the country, or engaging in the import and export industry, it will be more unfavorable. When looking for a job or starting a business, you should pay attention to this negative news and try to avoid it.
The United States continues to raise interest rates, leading to a global economic recession
Second, please note in the stock market and investment that the Federal Reserve's interest rate hike will lead to a sharp rise in the yield on 10-year Treasury bonds , and , thus leading to a continuous decline in the global financial market. In recent months, , A-share , fell by , which was caused by the US rate hike. The same is true in the exchange rate market. Why is the RMB depreciating so much? Why are non-US currencies in the world losing blood? The main reason is that the Federal Reserve holds the hegemony of the US dollar, and the dollar is really too strong.
So, family members and relatives and friends can hold some US dollars to avoid risks. After all, everyone has a foreign exchange purchase limit of US$50,000 every year. The People's Bank of China is actually constantly selling US Treasury bonds to stop losses. The truth is the same.
Third, the stability of China's CPI prices means we don't have to worry too much about prices. The continuous weakening of real estate means that the time for the urgent need to buy the bottom of is coming. If you are buying a house, still needs a mortgage interest rate of 6%+ at the beginning of last year. Now the lowest mortgage in Tianjin has fallen below 4%, and it has come to 3.9% . Other places may follow up immediately. With such a low interest rate, those who need to buy the bottom can indeed consider buying the bottom. After all, buying a house is now a measure to support the national economic construction.
More than 0 cities have fallen below the 4% mark.
Of course, what more ordinary people need is not consumption, but work hard to make money and save enough "safe-haven funds" for their families.
If there is no income in the next 5 years, can we survive the crisis safely? Are our household debts a lot? Still have credit cards and loans not paid? These are all issues we need to consider.
summary
China and the United States have now embarked on completely different paths. The United States continues to raise interest rates to curb inflation. The problem is that they have insufficient supply and strong demand . But China is different. We are the world's largest producer, with sufficient supply, but there is a shortage of demand.
China's economic defense war will surely achieve the final victory! In the general direction, the senior management has restored the economy by stimulating infrastructure, expanding domestic demand, stabilizing foreign trade and other means. Before these three policies take effect, what we need is to survive the economic downturn and wait for the moment when the future is dark.
China's economy has been in turmoil and rain, and has encountered many difficulties along the way. I believe that the great rejuvenation of the Chinese nation will surely be realized, and the Chinese economy will also move towards new victories!
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