There are two different understandings of what inflation is: one is popular language; As long as the price rises obviously and lasts for a period of time, it is considered inflation, so the rate of price increase is also the inflation rate. Proceeding from this understanding, this price increase in China belongs to inflation. The other is academic language; It is believed that inflation is an obvious, universal and sustained rise in the price level. At present, the price increase in China has been going on for 18 months, and the overall price level has risen, rather than the general prices of various commodities, especially wages, rent and interest. Therefore, according to the requirements of academic language, it is not inflation in the full sense. But if left unchecked or macro-control is not good, it will become full-scale inflation. The interest rate hike was made at a time when the overall price level was at a high level for several months in a row. Although the magnitude is not large, it has curbed inflation to some extent.

(2), the impact on investment.

Last year, the state's administrative compulsory macro-control largely curbed the overheated investment in some industries, such as building materials, real estate and automobile projects. The national housing price level rose by 13% in the first nine months of this year, which is the highest year-on-year increase since 1996, and has also aroused strong reflection from low-and middle-income groups. Therefore, on the one hand, this interest rate hike will curb the overheating of investment to a certain extent, and on the other hand, it will consolidate the achievements of macro-control.

(3) Impact on consumption:

From the data point of view, consumption growth is still relatively stable. This rate hike will not have much impact on consumption, because the rate hike is still relatively small, and people will not change their original plans in order to earn more than 0.27 percentage points a year. Therefore, raising interest rates has little impact on consumption and will not lead to shrinking consumption.

(4), the impact on foreign exchange:

Statistics show that in the first half of this year, China's balance of payments current account, capital and financial account showed a "double surplus", and foreign exchange reserve assets increased by 67.388 billion US dollars compared with the end of last year, reaching 470.639 billion US dollars, and foreign exchange reserves maintained rapid growth. However, many of these increased foreign exchange are "hot money" poured in by investors in anticipation of RMB appreciation. After the interest rate hike, people's expectation of RMB appreciation is further increased, which makes foreign capital enter the China market as never before because there is no interest rate risk. The pressure of foreign exchange is increasing, and the pressure of inflation will also increase. The original intention of raising interest rates is to curb inflation, but in fact, due to the large amount of base money, the expectation of RMB appreciation will bring new and greater pressure. Therefore, raising interest rates cannot solve the foreign exchange pressure.

summary

This interest rate hike will not have a great impact on China's economic development, but it is a signal that China may use interest rates more to regulate its economy. Some experts predict that the new round of interest rate adjustment will not last long.