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The “Right of Speech” of Six Price Indices of Chengdu

A total of 1797 people read this information  Updated Time:2015-06-30  [Return to list]

For three consecutive weeks, the price of liriope is “as steady as Mount Tai”, ----and according to the latest Chinese herbal medicine indices of Chengdu released on June 22, China released by the website of Ministry of Commerce, the weekly price index of liriope is 46.15, with 0% rise comparing to that of last week.
This index came from Hehuachi Chinese Herbal Medicine Market of Chengdu International Trade City (CITC) and it is released by the operator of CITC, which is one of the six price indices currently operating in Chengdu.
The release of price indices is a economic indicator reflecting the change direction, trend and degree of a set of commodity price level in different periods, which is considered to be an important thrust to fight for the “right of speech of price”. Now many cities in China are fighting for the position of “first index releaser”.
How are this price indices released? And what is the role of price indices? What are the considerations of Chengdu for the building of price index platform?
What is price index?----the wind indicator for forecasting market price
According to the latest Chinese herbal medicine indices of Chengdu, China, the current weekly combined price index is 164.84, declining by 1.82% comparing to the last week, reaching the lowest point in the past six months. And it is expected by the index releaser that the next market information would not fall sharply and would have callback by a modest rise.
How can we get these indices? The releaser----Yu Li, the general manager assistant of Yisha Chengdu International Trade City Co., Ltd. gave an example by stock index: the professional agencies choose several kinds of representative sample stocks from the listed stocks and calculate the price average number or index of these sample stocks to represent the general trend and the amount of increase and decrease of stock prices of the entire market. “Currently, there are six price indices operated in Chengdu and the calculating principles are much the same. ”
Therefore, the collection of sample prices and other basic data is the most important.
The Yurun Sichuan International Agricultural Product Trade Center located in Mengyang Town, Pengzhou, is now the largest fruit and vegetable wholesale market in Southwest China with average daily trading volume of 9000 tons and the trading Center officially released (Yurun) vegetable index of Pengzhou, China prepared by themselves.
We specially invite the professional team from Southwestern University of Finance and Economics to build professional index calculation and analysis system. Using this system, we only need to fill in the vegetable prices collected everyday, then the general daily index of vegetable prices and the daily index of every single product will be generated automatically. The collection of basic data depends on the 30 price collector hired by the market, introduced by Li Shaoming, the vice general manager of the trading center.
Yang Yong, as a professional purchaser gained the position of “price collector” provided by the trading center, because he deals with the wholesalers, makes inquiry and shops around everyday, “I collect the prices of at least 20 kinds of vegetables and fill in and hand in the forms before 12 o’clock.”
The expectation of price indices----going after “Yiwu effect”
In recent years, the turnover of Hehuachi Chinese Herbal Medicine Market has been showing a rapid rise, from 6 billion yuan in 2009 to 28 billion yuan in 2014.
“Although we can not say the release of price indices has played a direct role to the rise of turnover, there is definitely a relationship between the two.” According to Yu Li, the release of price indices increased the popularity of Chengdu Hehuachi Market and attracted the attention of more trader dealing with Chinese herbal medicine, “larger turnover brings higher authority of price indices and in turn, the price indices with higher authority can promote the rise of turnover.”
Li Shaoming quite agree with this point, “during the developing process of Yiwu Small Commodity Market, the small commodity indices of Yiwu, China played a significant role. The Yiwu indices need to be considered during the pricing of small commodity in China, so Yiwu gained the right of speech in pricing and promoted continuous change of Zhejiang from a manufacturing center to a international procurement center; we also hope to build the Yurun Sichuan International Agricultural Product Trading Center as a larger procurement platform by releasing the price indices.”
Yu Li believes the Chinese herbal medicine price indices may play more roles, “we can cooperate with the government to guide the planting varieties and amount of Chinese herbal medicine planting farmers by carrying out deeper analysis on the price indices, so as to optimize and expand the local Chinese herbal medicine industry.”
The release of price index also is linked with livelihood security. Li Shaoming said a few years ago, the agricultural products were hyped wantonly. The hype of garlic and ginger and other problems frequently arose, which is because the difficulty for most of the consumers to grasp the production, inventory and other information of agricultural products. Strengthening the publicity of price information by price index can guide the expectation of public to price change to reduce information asymmetry.
The future of price index----strengthen the influence of “Chengdu price index”
“Urgent”----this is the description of urgency of this issue included in “Recommendations on Accelerating the Construction of Chengdu Price Index Platform” published in Chengdu.
Currently, all of the six price indices of Chengdu are completed by the guidance of market entity. “the government has contacted with us on developing new price index and after consideration, we think the government should set up the project first, and provide some financial support.” said Yu Li.
Although four of the six price indices have been crowned as “national price index”, the “Recommendations” still belive that the influence of “Chengdu price” has not yet been fully realized, which should be standardized and integrated. For example, the service range of (Yurun) vegetable index of Pengzhou, China is limited in the areas surrounding Chengdu due to the bad propaganda.
As the construction of price index platform is a basic, long-term and overall work, the research team suggests that “advance by classification after integration”, namely, carry out assessment to the existed price indices and build unified release platform; then classify based on regional, national, international and other varieties. Build a group of commodity and service price indices with the “right of speech” in 5 to 8 years.
The construction of unified release website for Chengdu price indices and actively striking for the authority release of central and provincial media is in consideration. How to better play the power of price index? The research team suggests that organize a analyst team in the manner of government purchase, regularly held price situation discussion while build warning system for Chengdu price indices.

From Sichuan Daily, June 29, 2015


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