March's CPI data shows that non-food prices, inflation pressures appear to increase. Some analysts believe that this change may cause CPI "easy on the hard under the" center of the next 5 years the level of inflation may increase over the previous corresponding, China's rate hike cycle, this round may also be elongated.
China's CPI in March increased by 5.4% year on year, exceeding market expectations. CICC's weekly interest rate that the main factors which a non-expected rise in food prices than expected, while food prices were down compared to previous years, which means that the main factors pushing up CPI turned to the non-food from food.
Non-food factors into the CPI "the main push hands"
        Data show that since last December, an increase of non-food prices showed a rising trend from month to month, and over the same period of history. 1 to 2 this year, seasonally adjusted non-food an average increase of 2.45%, higher than 2.1% in December last year; March non-food prices continue to rise to 2.7% year on year, marking the highest level since 2001.
        In contrast, food prices rose year on year although higher than the non-food, but well below record levels, food prices in March rose 11.7% year on year, while the highest point in the same period of history is a record in March 2008 to 21.4% .
        Bank's estimates also showed that non-food prices up for the March CPI exceeds the contribution of higher food prices. Estimates show that March non-food prices last month by more than 0.4 percentage points, pulling CPI rose by 0.28 percentage points, while food prices increased more than 0.7% in February, CPI rose 0.21 percentage point pulling the two together to promote the March CPI 0.49 percentage points higher year on year.
        "Non-food inflation in the current round to become an important driving force," CICC report said structural element is the food inflation pressures the main factors, including the right of residence re-raise, increased labor costs, excess capacity, ease the situation and so on. These factors have a certain rigidity, which will lead to future CPI "easy on the hard down" the level of the central uplift than previously.
        Of gold expected in the next 5 years may be from central China's inflation rate of 3% to 4%, an increase of no more than 2007 and 2008 high point, but the bottom will be significantly higher than the bottom of the last cycle.
        Second half of 2007 to the first half of 2008, China's January CPI year on year growth remained at 6% to 8%, the highest in February 2008 reached a high of 8.7%. The CPI in China since the March 2010 year on year growth remained at an average of about 3%. And 3% inflation rate in years, set by regulators for the regulation of target.
        Lu political commissar, chief economist at Industrial Bank also believes that the rise in labor costs would push up inflation in the future the central level of a long-term factors, in addition, Japan's nuclear crisis left by the "consequences" of traditional energy sources could make more by Wei Lai favor, energy prices may also lead to higher inflation.
Central level of the inflation rate the central level rise or uplift
        If the central level of inflation rose, interest rates, the whole society will also be along the central uplift. If the central inflation rose to 3% to 4%, which also requires a corresponding long-run equilibrium in the level of deposit interest rates may rise to 3% from the previous 4%. Gold that the next 1 to 2 years to 4% of deposit rate will be a high probability event.
        "The central bank will raise interest rates to slow, do not cut strategy to gradually modified China's low interest rates, and adapt to the new level of inflation." CICC said in a report, which means that this round of rate hikes may be a round of the long cycle.
        Hub for the future rise in inflation, Bank of Communications Center for Financial Research Fellow Tang Jianwei disagrees. In his view, inflation is cyclical, not long remain at a high level. However, China's future interest rates will probably remain at a relatively high level.
        Tang Jianwei that from the perspective of future economic restructuring, China will need to correct the long-term real interest rates negative for the state to improve the efficiency of capital allocation, facilitate restructuring and industrial upgrading, so interest rates will be uplifted.
        In this regard, Lu pointed out that the political commissar of the next five interest rate market will gradually push forward reform, the central bank to control interest rates will be reduced, from this perspective, our interest rates on the central level there is the possibility. (Guo Ru)