In the process of rapid economic growth, a certain degree of price increase is difficult to avoid
National Development and Reform Commission deputy director of the Penson in the "Seeking Truth" magazine published an article that argues that in the future price reform must have better timing, tempo and intensity of reform. It is necessary to consider the needs of economic development, but one must also take into account social affordability; neither the overall price level can stop reform nor can one focus on the introduction of reform measures because the overall price level is relatively stable.
The article points out, one must be conducive to ensuring a proper market supply and promote economic development principles, and have proper timing of the introduction of price reforms. You should solve easier issues first, giving urgent relief then after make arrangements for the introduction of better reform measures and allow the market to maintain a good rhythm allow the capacity and market demand to remain in accordance with social requirements.
Meanwhile, the article stressed that price reform must be promoted with coordination and taxation, income distribution, social security and many other aspects of reform. One must improve the supporting measures of reform and thus reduce the negative impact to a minimum. To improve the resource tax, in particular income groups and to fix the price adjustment fund, transfer payments, price subsidies, social assistance and security interests there must be a mechanism to prevent price adjustments caused by an uneven distribution of benefits and to prevent excessive increase in the public service industry and one must not burden disadvantaged group which would only induce social instability.
Price reform and the relationship of a stable price level, in the short term works to promote the resources and the environment. But in the long term the price must to some extant be pushed up to some degree, as this is impacted by increased production and is a natural effect in life. In the long term, rationalization of the prices of resources and the environment is conducive to promoting resource conservation and environmental protection. One must increase supply and curb unreasonable demand to promote sustainable economic development patterns; long-term stability means healthy development of both the economy and the price level .
In addition, the article also said that in the process of rapid economic growth, a certain degree of price increase is difficult to avoid. The article points out that as a developing country, China will be facing a long-term trend of two inevitabilities: First, with the urbanization of China, urban and rural consumption levels, demand for agricultural and sideline products will continue to increase, prices are rising and this rising trend is inevitable.
Second in China the people have a low share of per capita resources, with the rising trend of prices and resources, an increase in labor costs and environmental protection costs are inevitable. According to statistics, from 2005 to 2010, China's industrial enterprises raw fuel and power purchase price index has risen 42 percent.
In land transactions, prices are up 79.2 percent, rural labor costs have risen 136 percent. These costs, sooner or later must be reflected in the final price. Economic transformation especially in the rapid development stage means moderate price increases are not only inevitable but with proper planning can be withstood.
