Global inflation means that currencies will depreciate, prices will rise, and a large number of companies will have their capital chains broken and go bankrupt. Global inflation is global inflation. After the outbreak of the epidemic in 2020, various countries had to suspend work and production in order to prevent and control the epidemic, which led to a reduction in production capacity. All commodities are in short supply, and are labor-intensive. This is especially evident in the type of industries.

1. Global Inflation

Global inflation is global inflation. After the outbreak of the epidemic in 2020, various countries had to suspend work and production in order to prevent and control the epidemic, which resulted in Due to the reduction in production capacity, all commodities are in short supply, especially in labor-intensive industries. For example, the supply of primary processed products, minerals, textiles, etc. will inevitably lead to price increases. Increased costs in the upstream of the industry chain will further lead to price increases for downstream or end products. The price increase of Coca-Cola is a good example.

In order to stabilize prices, the best way is to issue currency. From the data point of view, 20% of the existing currency in the United States was mostly printed in 2020, while 10% of the total currency in Japan and Europe was It was printed last year. Central banks in major countries took turns to stage epic "monetary releases." But this year, a new wave of large-scale releases is already on the way. When more currency is issued, the money in hand will naturally become worthless, thus causing inflation.

2. Impact on my country

First of all, our country is a big foreign trade country, and its economic growth relies heavily on foreign trade. As an important factor that once drove China's economic growth along with investment and real estate, "Troika", before the global financial crisis, our dependence on foreign trade (i.e. foreign trade exports plus total foreign trade imports/total GDP) was as high as more than 65%. Although it has been declining year by year, the dependence is still as high as 31.4% . This shows that most of our country's production, manufacturing and people's livelihood rely on imports, such as soybeans, oil, iron ore, etc. If a country mainly relies on imports for the raw materials required for production, then the increase in the price of imported goods will cause cost-push inflation. .

Secondly, our country is a country with a large foreign trade surplus. The direct cause of inflation is that the amount of currency in circulation in a country is greater than the total effective economic aggregate of the country. The direct reason is that the growth rate of a country's base currency issuance is higher than the growth rate of the country's effective economic aggregate. The reasons why the growth rate of a country's base currency issuance is higher than the growth rate of the country's effective economic aggregate include both monetary policy and non-monetary policy. aspect.

Non-monetary policies, including the financial system dominated by indirect investment and financing, have caused loan expansion, long-term excessive export surplus in international trade, excessive foreign exchange reserves, speculation, monopoly, corruption and waste, increasing social transaction costs and reducing economic development. quality, imbalance in economic structure, misleading consumption expectations, etc.

Finally, my country’s currency issuance is mainly anchored by foreign exchange reserves. At present, my country’s currency issuance system is mainly the “exchange standard system”, that is, through the issuance of RMB, the inflow of foreign exchange is compulsorily settled, and the RMB exchange rate Adopt a strategy of pegging to the US dollar to keep the RMB exchange rate basically stable.

Long-term foreign trade surplus has led to more and more foreign exchange reserves in our country. In order to maintain a stable exchange rate, the central bank must adopt the method of issuing currency. This is why the United States always says that we are an exchange rate manipulator.

The above three aspects all illustrate that global inflation is bound to cause inflation in our country.