The Chinese authorities decided to resort to the methods of struggle with the rise in prices, which from the end of last year are implemented in Russia. National manufacturers ordered to restrain the value of raw materials, including ore and coal, writes Nikkei Asia edition.
China is the largest consumer of iron ore and copper, the prices for which this year took off due to the demand for industrial goods against the background of the restoration of the global economy from the pandemic. The State Committee for Development and Reforms of the PRC (NDRC) (NDRC)) on May 23 demanded from leading manufacturers of the country not to raise prices for copper, coal, steel and iron ore.
Normal production and sales in the Metallurgical industry of China have already been violated, which led to the increase in prices. The high cost of raw materials negatively affects the economy of the country. In particular, the cost of copper has led to a reduction in metal production, “the representative of NDRC explained.
The authorities will strengthen the supervision of commodity futures and spot market (with delivery within two days after the transaction) to eliminate the likelihood of price conspiracy of commodity speculators, whose activities are even more inflating demand for raw materials and leads to global inflation.
After the NDRC statement, the prices of metals on China’s commercial exchanges fell sharply. The most traded futures for iron ore fell by 9.5 percent, futures for copper and aluminum on the trading platform in Shanghai lost in price of more than 2 and 4 percent, respectively.
“Rising commodity prices feed inflation, and this causes the concern of the authorities, since the disposable income of China’s population has not returned to an additional memorial level. Inflation is provoked and the fact that commodities have been repeatedly used as a collateral to increase the credit shoulder,” Explained the chief economist of the investment bank Natixis in the Asia-Pacific region Alicia Garcia Errroo.
A similar scenario, according to which President Vladimir Putin demanded from domestic producers of prices to retention, started in Russia in December 2020. The first limitations touched the basic food products – sunflower oil and sugar. The Kremlin recognized the measures efficient and plans to spread them on eggs and pasta. At the same time, the spending of Russians speak about the opposite – in the first month after the declaration of the expenses of the country’s residents on one-time purchase of five categories of goods sharply increased by 1.5-4 percent.