On June 24 news, the price level in the United States has recently risen. Analysts said that due to the large share of Chinese products in the US consumer goods market, China’s domestic price factors have also pushed US inflation to a certain extent.
In the past six months, US inflation has increased month by month. According to data recently released by the Ministry of Labor, the US inflation rate reached 3.57% in May this year. This is the highest level since October 2008.
According to the U.S. media, the rise in inflation can of course be explained by an adequate supply of money. On the other hand, some economists believe that the rise in the prices of many "Made in China" commodities on which the Americans depend to survive has helped push up inflation in the United States.
According to the statistics of the US Department of Commerce, the United States imports nearly 80% of its footwear imports, imports 70% of its tie, 50% of its gloves, and nearly half of its clothing comes from China. In 1995, the total amount of Chinese food imported from the United States was only US$800 million. Right now, this figure has already exceeded 5 billion U.S. dollars.
Due to China's domestic inflationary pressure, the average price of Chinese exports to the United States began to rise in the third quarter of 2009, and at the end of 2010, it exceeded the rise of the US CPI.
The Wall Street Journal reported that the transmission of China's inflation to the United States is most prominent in clothing and footwear products. According to a report quoted by the U.S. Clothing and Footwear Association, the prices of clothing and footwear in the U.S. market will increase by 4 to 6 percentage points from the same period last year.
Eugenio Aleman, senior economist at Wells Fargo Energy and Emerging Markets, told reporters that due to the lagging pricing mechanism, China's inflationary pressures will be more apparent to the United States in the second half of this year. The increase in the income level of the Chinese labor force is one of the main reasons for the increase in the cost of "Made in China." He said:
"In recent quarters, we have seen that the level of China's labor income continues to rise. Workers are demanding to raise their income levels. The government has also begun to allow labor forces to raise revenue."
According to figures released by the National Bureau of Statistics of China, the average annual income of Chinese urban population reached 5,500 US dollars in 2010, which is 13% higher than that in 2009 and 77% higher than that in 2005. In contrast, the growth rate of rural population income lags behind.
Aileman pointed out that apart from labor costs, the appreciation rate of the Chinese government allowing *** to close to 30% of the US dollar since 2005 has also increased China’s export price to the United States. However, he believes that the impact of this factor is limited. He said:
“Chinese manufacturers will pay special attention to this issue. If exchange rate problems cause export products prices to rise too quickly, importers will shift to other places. We expect that Chinese manufacturers will still sacrifice some profit margin in the short term to keep them in the United States. market."
Aileman believes that one of the more significant factors driving the steady rise of US inflation is the huge demand for commodities in emerging markets. He said:
“This is a slow process and it has been going on for some time. We don’t expect it to end in the near future. The greater the pressure on input costs, the greater the pressure on prices of finished products we expect.â€
At present, China's cotton demand currently accounts for nearly 40% of global demand. And 10 years ago, the global share of China's cotton demand was only 25%. Since August last year, the cotton price in the international market has more than doubled.
However, Aleman, senior economist of Wells Fargo Energy and Emerging Markets, believes that although the US CPI has continued to rise recently. However, it needs to be pointed out that the U.S. price level has a low base and a small increase. Taking into account the overall weak economic growth, the Fed will not be too nervous about the inflation input from China. He said:
"The Fed basically hopes that inflation will be higher. They don't say that, but they hope that there will be more inflation. Because for the current US economy, it's even more terrible to fall into deflation."
The Federal Reserve lowered its economic forecast for the next two years on Wednesday. This is the second time the Fed has lowered its economic growth forecast within six months this year. The Fed estimates that this year's US GDP growth rate will be between 2.7% and 2.9%, and the long-term growth range will be between 2.5% and 2.8%.
In the past six months, US inflation has increased month by month. According to data recently released by the Ministry of Labor, the US inflation rate reached 3.57% in May this year. This is the highest level since October 2008.
According to the U.S. media, the rise in inflation can of course be explained by an adequate supply of money. On the other hand, some economists believe that the rise in the prices of many "Made in China" commodities on which the Americans depend to survive has helped push up inflation in the United States.
According to the statistics of the US Department of Commerce, the United States imports nearly 80% of its footwear imports, imports 70% of its tie, 50% of its gloves, and nearly half of its clothing comes from China. In 1995, the total amount of Chinese food imported from the United States was only US$800 million. Right now, this figure has already exceeded 5 billion U.S. dollars.
Due to China's domestic inflationary pressure, the average price of Chinese exports to the United States began to rise in the third quarter of 2009, and at the end of 2010, it exceeded the rise of the US CPI.
The Wall Street Journal reported that the transmission of China's inflation to the United States is most prominent in clothing and footwear products. According to a report quoted by the U.S. Clothing and Footwear Association, the prices of clothing and footwear in the U.S. market will increase by 4 to 6 percentage points from the same period last year.
Eugenio Aleman, senior economist at Wells Fargo Energy and Emerging Markets, told reporters that due to the lagging pricing mechanism, China's inflationary pressures will be more apparent to the United States in the second half of this year. The increase in the income level of the Chinese labor force is one of the main reasons for the increase in the cost of "Made in China." He said:
"In recent quarters, we have seen that the level of China's labor income continues to rise. Workers are demanding to raise their income levels. The government has also begun to allow labor forces to raise revenue."
According to figures released by the National Bureau of Statistics of China, the average annual income of Chinese urban population reached 5,500 US dollars in 2010, which is 13% higher than that in 2009 and 77% higher than that in 2005. In contrast, the growth rate of rural population income lags behind.
Aileman pointed out that apart from labor costs, the appreciation rate of the Chinese government allowing *** to close to 30% of the US dollar since 2005 has also increased China’s export price to the United States. However, he believes that the impact of this factor is limited. He said:
“Chinese manufacturers will pay special attention to this issue. If exchange rate problems cause export products prices to rise too quickly, importers will shift to other places. We expect that Chinese manufacturers will still sacrifice some profit margin in the short term to keep them in the United States. market."
Aileman believes that one of the more significant factors driving the steady rise of US inflation is the huge demand for commodities in emerging markets. He said:
“This is a slow process and it has been going on for some time. We don’t expect it to end in the near future. The greater the pressure on input costs, the greater the pressure on prices of finished products we expect.â€
At present, China's cotton demand currently accounts for nearly 40% of global demand. And 10 years ago, the global share of China's cotton demand was only 25%. Since August last year, the cotton price in the international market has more than doubled.
However, Aleman, senior economist of Wells Fargo Energy and Emerging Markets, believes that although the US CPI has continued to rise recently. However, it needs to be pointed out that the U.S. price level has a low base and a small increase. Taking into account the overall weak economic growth, the Fed will not be too nervous about the inflation input from China. He said:
"The Fed basically hopes that inflation will be higher. They don't say that, but they hope that there will be more inflation. Because for the current US economy, it's even more terrible to fall into deflation."
The Federal Reserve lowered its economic forecast for the next two years on Wednesday. This is the second time the Fed has lowered its economic growth forecast within six months this year. The Fed estimates that this year's US GDP growth rate will be between 2.7% and 2.9%, and the long-term growth range will be between 2.5% and 2.8%.
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