By Wang Likun, Research Institute of Market Economy, DRC

Research Report, No.23, 2021 (Total 6088) 2021-2-25

Abstract: In 2021, the price of industrial raw materials would reveal a trend from a high rise to a sharp fall performance. It is expected that the prices of many kinds of industrial materials will rise across the board, but such a performance would not last for long, and the inflection point of falling prices will appear in the second half of the year. In view of the characteristics of China's economic cyclical fluctuations in recent years, industry has played the principal role for economic recovery, and the industrial operation is greatly affected by the total demand and price environment. In 2021, it is expected that the aggregate demand will, after further release, gradually slow down and the excessive rise and sharp fall of industrial raw material prices will exert dual restraints on demand and supply, damaging the vitality of the secondary industry, reducing the resilience of the overall economic recovery and leading to the unsustainable and unstable operation of the economy. We need to strengthen macroeconomic regulation and control, continue to promote the supply-side structural adjustment, take the demand-side management as the key leverage, stabilize the prices of industrial raw materials and the profits of industrial enterprises, prevent and control relevant economic and financial risks, promote the steady recovery of economy, and create favorable conditions for the recovery of service industry and for the transformation of economic growth drivers from quantity expansion to high-quality development.

Keywords: macroeconomic regulation and control, price, bulk commodities