China News Service, Beijing, December 2nd. Title: Interview with Kang Yong, Chief Economist of KPMG China: China’s economy continues to recover and the trend remains unchanged

  Author Liu Wenwen Pang Wuji

  At present, uncertainties in the global economy have increased, energy shortages have become increasingly prominent, and international supply chains have been hit by the epidemic. While inflationary pressures in Europe and the United States have not yet eased, the emergence of the new variant of the new crown virus strain Omi Keron once again The global market is in panic.

Given multiple factors, what is the future trend of the global economic recovery?

What are the expectations of China's macroeconomic development?

Recently, a reporter from China News Service interviewed Kang Yong, chief economist of KPMG China, on the above issues.

Is inflation "temporarily" rising?

  Since the beginning of this year, inflationary pressures in developed economies such as Europe and the United States have risen rapidly.

Data show that the CPI in the United States rose 6.2% year-on-year in October, the highest increase in 30 years; similarly, the CPI in the Eurozone rose 4.1% year-on-year in October, reaching the highest level since July 2008.

On November 30, Fed Chairman Powell also removed the statement that the rise in inflation was "temporary" in his latest speech.

  How long will this inflation storm last and will it affect China?

  Kang Yong pointed out that in the third quarter, under the combined influence of supply-side production capacity has not been fully repaired, the relaxation of epidemic prevention measures and loose stimulus policies have led to increased demand, and international transportation pressures have led to supply chain tensions, inflation and inflation expectations in the United States have continued to remain high.

  He further analyzed that, affected by the increase in crude oil prices, the CPI for energy and transportation reached 24.8% and 16.5% respectively in September, which was the main driving force for US inflation.

In addition, the supply of electronic products such as computers and mobile phones is insufficient due to the shortage of important parts and production capacity has not yet recovered. In September, the relevant CPI also rose significantly to 8.5%.

The current accumulation of goods due to the lack of container storage space in US port cities will continue for some time. “It is expected that subsequent companies will still face increased supply chain pressure, and the high inflation in the United States may continue until the middle of next year.”

  "Rising inflationary pressures in Europe and the United States will have a huge impact on the global economy. Production capacity will be suppressed by rising costs, and the demand side will be dragged down by rising prices." The impact that imported inflation may have on the Chinese economy."

"Energy Winter" is coming?

  Recently, the global energy shortage problem has become more and more serious, and the international supply chain has continued to be affected, which has exacerbated market volatility.

How much does this affect China?

  Kang Yong said that the rise in international commodity prices represented by coal, oil, and natural gas in the past few months has pushed up China's PPI, resulting in a year-on-year increase of 13.5% in October's PPI.

  He continued to analyze that, on the one hand, after the relaxation of epidemic prevention and control measures in advanced economies, the concentrated release of demand for energy commodities, and the rising demand for heating in the "cold winter" this year, etc., have caused a phased gap in supply and demand and pushed up commodity prices. .

At the same time, the previous period of time restrictions on the production of high-energy-consuming industries such as coal also affected the supply of some raw materials, causing prices to rise.

In this context, electricity and production restrictions have appeared in some areas, which has caused a certain disturbance to industrial production.

  Looking ahead, Kang Yong predicts that with the gradual improvement of the epidemic, the supply of upstream raw materials and products will continue to recover, and the tight supply and demand will be eased. With this year's high base effect, PPI is expected to fall steadily next year and drive the restoration of China's industrial production. .

At the same time, the cost pressures of mid- and downstream manufacturing companies will also be relieved to a certain extent to support the investment of manufacturing companies.

The trend of continued recovery remains unchanged

  Despite the complex and volatile global economic situation, Kang Yong is still confident in China’s economic development in the fourth quarter and pointed out several highlights of China’s current economy: First, exports remain strong. Due to low vaccination rates in some emerging market economies, work and production resumed. It is relatively slow, forming a certain substitute export demand for China’s manufacturing industry, which will continue to support foreign trade in the future; the second is the increase in coal supply, the alleviation of power shortages, and the slight year-on-year increase in industrial production; the third is the promotion of double eleven and other promotional activities. The total retail sales of consumer goods increased year-on-year.

  "Despite the recent slowdown in growth, the trend of China's economic recovery has not changed." At the same time, he also reminded that the economic recovery is not yet balanced, and the more contagious mutant virus is still spreading, which will also drag down the growth of household consumption. China's economic recovery will face greater challenges in the coming period.