Li Daokui, professor at Tsinghua University and CPPCC National Committee member, takes interviews after the opening ceremony of the First Session of China's 12th National People's Congress on March 5, 2013.
China will continue to face relatively high inflation pressures in the next five to ten years, a renowned economist and CPPCC National Committee member stated when taking interviews after the opening ceremony of the First Session of China's 12th National People's Congress on March 5.
Li Daokui, professor at Tsinghua University and former academic member of China's Monetary Policy Committee, illustrated that the changes taking place in China's economic structure form the primary cause for inflation pressure; the change in the labor force market weighs heaviest.
China's working age population numbers dropped for the first time in 2012, according to the official figures released in January of this year. The decrease is related to birth rate change and the working age population will steadily shrink by 2030, said Ma Jiantang, head of the National Bureau of Statistics, in a previous related news briefing.
"The past epoch of sufficient labor supply is gone," Li said. "The increase-speed of manual workers' wages will be well over the GDP growth rate in the future." As most blue-collar or construction workers come from rural areas, agricultural production costs will go up and so will the selling prices of agricultural products, he pointed out as the fundamental reason behind inflation risks.
Li added that the possibility of the global liquidity glut, the boom in commodity prices and other elements from the global market, may also pose imported inflation threats to China. However, he expressed that the possibility has not entered his calculations based on current conditions. "As the economic growth of India, Brazil, South Africa and other emerging economies is slowing down, their demands for raw material become sluggish and commodity prices could not be as high as they were two years ago," he explained.
With regards to the target for increases in the CPI set around 3.5 for this year as stated in Premier Wen Jiabao's previous government work report, he stressed that in order to realize it needs arduous and earnest efforts, people from all walks of life should fully prepare to overcome any difficulties they may encounter.
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