ThePaper.cn:

The CPC Central Committee has proposed promoting a "reasonable recovery in prices," and there are differing views in society on price issues. How should we view price issues? How can we promote a reasonable recovery in prices? Thank you.

Wang Changlin:

The question you raised is one that many people are currently concerned about. Price issues affect both economic operations and are closely connected to people's lives. We should view this issue from a dialectical perspective. As we all know, a rapid increase in prices will drive up the cost of living for residents, while lower prices will indeed help residents save money in the short term. However, if the prices remain low for an extended period, this will be detrimental to enterprises' revenue, leading to declining employment and reduced income growth for residents. It will also have an adverse impact on the overall economic cycle. Therefore, promoting a reasonable recovery in prices is an important objective of our macroeconomic management.

In accordance with the decisions and arrangements of the CPC Central Committee and the State Council, we, together with relevant departments, have implemented a series of regulatory, reform and supervisory measures to promote a moderate recovery in prices. Since the fourth quarter of 2025, price trends have shown signs of improvement. The consumer price index (CPI) has rebounded for four consecutive months. The CPI rose by 0.8% year on year in December, reaching its highest level in nearly 34 months. The core CPI has held steady at a 1.2% year-on-year increase for three consecutive months, the highest rate in nearly 50 months. The producer price index (PPI) decline has also narrowed. In December, the PPI decreased by 1.9% year on year, a rebound of 1.7 percentage points from the low point of the year. Throughout this process, we have pursued targeted structural policies, prioritizing stable supply and pricing of goods essential to livelihoods while working to keep prices of basic necessities stable. As you can see, while the overall CPI has rebounded, the prices of essential consumer goods have remained stable. Food prices in the CPI dropped by 1.5% throughout the year. Overall, both the CPI and PPI have shown an upward trend, suggesting a recovery.

Next, we will earnestly implement the guiding principles of the Central Economic Work Conference by strengthening structural regulation, adhering to a two-way approach that simultaneously addresses supply and demand, with regulation and reform working in coordination. We will also work together with relevant departments to implement a comprehensive set of policies to continuously promote a reasonable recovery in prices. In terms of aggregate policies, we will implement a more proactive fiscal policy and a moderately accommodative monetary policy, take promoting a reasonable rebound in prices as an important consideration in monetary policy, give full play to the integrated effect of existing and incremental policies, and foster a virtuous interaction between economic growth and price rebound. In terms of structural policies, we will further implement special initiatives to boost consumption, formulate and carry out a plan to increase the incomes of urban and rural residents, optimize the implementation of the "two new" policies (upgrades and trade-ins), and steadily advance the "two priorities" initiative—the implementation of major national strategies and security capability building in key areas—to better align supply with demand. We must intensify efforts to address "involution-style" competition, formulate regulations for the development of a unified national market, regulate the behavior of local governments and enterprises, reinforce the market's survival-of-the-fittest mechanism, and facilitate the exit of outdated and inefficient production capacity. The main focus is on both ends: on the one hand, expanding demand, and on the other hand, curbing involution-style competition. As everyone has seen, these two aspects have played a significant role in price rebound. In terms of policy reform, we need to further rationalize pricing mechanisms, promote efficient resource allocation, and ensure a safe and stable supply. At the same time, we must continue to ensure the supply of essential consumer goods and the stability of their prices, maintain tight regulation across the entire chain of production, supply, storage, and sales, and ensure sufficient supply and stable prices, thereby consolidating the foundation of people's livelihoods. Thank you.