By Fu Ruixue
Translated by Wang Jing
After the price rising of water in many cities, the adjustment of the electricity price is coming near. In the background of the complaining about deficit from all the five electricity generation groups and two electricity grid companies, the National Development and Reform Commission has discussed the plan of adjusting the selling electricity price with all the provinces recently, and the plan will come out this month with a most optimistic expectation. Will the civil electricity price commonly concerned by citizens be adjusted? Remarks from relevant departments are rather prudent, showing the plan will finally be determined by the state and it is hard to judge whether the civil electricity price will rise. Chinese Version>>
The range of price rising of product oil has been beyond the common social expectation, the fuel surcharge of the plane is going higher, the water price of many provinces has been raised, and now the electricity price is becoming higher. The tide of price rising of this round of resource price and public product price is becoming stronger. At the stage when the economy is growing slowly, there emerge the disagreements from people in various areas about whether product price, especially the price of the source of energy and public products, should be raised.
Some experts believe that now the data of CPI and PPI are all negative, and it is the best time to reform (actually raise) the price of energy resource and public products, which will help increase the data of CPI and PPI. Actually, it is a confusing recognition and a viewpoint without the back up of economics. It is the lack of needs and consumption of civilians that causes the negative data of CPI and PPI. The reason that causes the lack of consumption of civilians lies in the decrease of income, the increase of factors causing the indefinite income, lack of courage to consume, or having no consumption ability. Under the circumstance of having no consumption ability, is not it making things worse to raise product price? The price of resource energy and public products is formed by the threatening of monopolies and administrative orders, instead of the market system. Once the price is raised, it will increase the burden of civilians. Meanwhile, civilians will cut the consumption of other products, which is very unfavorable for starting domestic needs and revive domestic consumption. At present, the most urgent thing for Chinese economy is to increase domestic consumption right away. Increasing the consumption as soon as possible is the only way to solve problems of the investment limitation, the over productivity brought out by it, and the blow of export from trade protectionism. So, it is absolutely the wrong time to increase the price of energy resource and public products at a large scale at this moment, and it is a curb of the great situation of economic development.
The CPI decreased by 0.5% from the same period last year, and the ex-factory price of industrial products decreased by 5.8% from the same period last year. So, some experts believe that inflation will not occur in China in certain period. This kind of assessment is over optimistic, because though the domestic factors are so, factors determining inflation are not only domestic ones, but also international ones. At present, the price of international bulk commodity is increasing. Because of the acceleration of the devaluing of dollars, the increasing tendency is becoming more and more severe. China is a country highly depending on the import of resources, which will strike the price of domestic products. Actually, the inflation of the first half year of 2007 is also an importing inflation, and the importing inflation will attack China again. Besides, the lag-effect of excess liquidity caused by 4,000 billion investment and nearly 9, 000 billion credit launching of China will all cause certain shock to commodity price. Under such circumstances, additional increase of the energy price like electricity price and water price will greatly increase the expectation of inflation from various fields of the society.
Meanwhile, the electricity price of China has been increased for several times and civilians can not afford it already. Though electricity enterprises complain about their loss, where is the loss? What is the reason? This is a confusing account. We have to overcome the odd phenomenon whenever monopolies complain about the loss, the state increase the price. Since they are public products and monopolistic products, the price rising should listen more to the voice of civilians and consumers.