China's CPI index and the U.S. CPI index compilation of the different

Domestic CPI index unified implementation of the National Bureau of Statistics of the "eight categories" system, that is, the composition of the index includes food, tobacco, alcohol and supplies, clothing, household equipment and services, health care and personal goods, transportation and communications, entertainment, education and cultural goods and services, housing and other eight categories, each of which contains a number of specific items. Each major category contains a number of specific items, totaling more than 300 items. The composition weights are 34% for food; 14% for recreational, educational and cultural goods and services; 13% for residence; 10% for transportation and communication; 10% for medical care and personal goods; 9% for clothing; 6% for household equipment and maintenance services; and 4% for tobacco, alcohol and supplies. \r\n Let's take a look at how the CPI is established and represented in the United States. The staff of the U.S. National Bureau of Statistics (NBS) has to sample relevant businesses in the first three weeks of each month and conduct telephone interviews with about 23,000 retailers and other business establishments in 87 cities as a means of collecting the prices of 80,000 types of commodities and services, and analyze the same composition of commodities and services on a monthly basis in order to obtain basic information on the changes in the prices of consumer goods. To minimize noise in the statistics, the United States also publishes a separate Core Consumer Price Index (CPI), which is the CPI net of volatile factors such as food and energy.\r\n \r\n That is to say, the CPI measure changes over time.\r\n \r\n The CPI consists of the average of the retail prices of more than 200 different goods and services, which are grouped into eight major categories. In calculating the CPI, each category is given a weight that shows its significance. These weights are determined by surveying thousands of households and individuals on the weight of their purchases of consumer goods in the previous two years. These weights are revised every two years to keep the CPI weights in line with the changed consumer preferences of the population. \r\n \r\n For example, the CPI weights for the U.S. in January 2006 were composed as follows: residential (including home building, fuel and utilities, and furnishings and home repairs) weighted at 42.1%, food and beverages at 15.4%, transportation at 16.9%, medical care at 6.1%, apparel at 4.0%, recreation at 5.8%, education and communication at 5.9%, and other goods and services at 3.8%, etc. It can be seen that in the United States residents of residential consumption weight is the largest, more than 40%; followed by transportation, food and beverages. The weight of these three reaches more than 74%. \r\n \r\n It can be seen here that the CPI index of the United States is transparent and open in every aspect from data collection, data production, data publication and data revision. The transparency and openness of the data is used to ensure the scientific, standardized and authoritative nature of the data. For example, the weights of the CPI are not only constantly adjusted and revised according to the changes in the consumption patterns of consumers in the market, but the weights after each revision are completely open and transparent, thus enabling the government to establish the CPI to reflect the changes in the consumption patterns of the population as much as possible. \r\n \r\n But in China, not only is the process of collecting and producing information on the CPI index not open and transparent, but the CPI weights are also completely closed and non-transparent. Researchers can only rely on themselves to calculate and determine the CPI weights. Worse still, because the determination and measurement of China's CPI is not open and transparent, when this CPI is out of touch with the actual consumption of the population, the relevant functional departments will also use trumped-up reasons to hoodwink the public. \r\n \r\n On the contrary, in the United States, the establishment of the CPI index is not only abstracted from the actual lives of millions of residents, but also with the changes of time will continue to adjust the CPI. in the United States, the CPI can continue to reflect the continuity of the residents of the consumer life, but also reflect the changes in the residents of consumer life. The U.S. CPI weights are revised once every two years to truly reflect changes in consumption patterns. However, in China, first, the CPI does not have continuous historical data, because of the transition from a planned economy to the market its data statistical differences; second, the CPI weights why do not dare to open and transparent? The biggest problem may lie in the artificiality of CPI compilation and the unscientific design of weights. For example, China's CPI weights were determined according to the situation in 1993, when China just came out of the planned economy, both the abundance of consumer goods and the standard of living of the population's consumption, are not comparable with the current situation. For example, in the housing category, there was welfare housing under the planned system at that time, but after the reform of the housing system in 1998, the domestic housing consumption has undergone a fundamental change. If the 1993 situation is still used to measure the current housing consumption of residents, these CPI data will certainly mislead society and mislead the government decision-making. There is also the case with the weighting of food consumption. Although the present functionaries say that they are going to adjust the CPI weightings, the community simply does not know what the actual situation of the adjustment is. \r\n \r\n Because the U.S. CPI is open, transparent and up-to-date, it not only reflects changes in consumption patterns in the actual lives of residents, but also serves as an important reference for businesses, economic analysts and researchers. It can be said that any changes in the CPI are reflected in the expectations of market changes. In this way, it is not only beneficial to the economic behavior of enterprises and individuals, but also to the decision-making of the government. However, due to the non-transparency of the domestic CPI in terms of statistical methodology, thus enterprises and individuals do not pay enough attention to the CPI data released by the government, and the government's decision-making by means of such data will easily result in insufficient judgment of the economic situation, and may even affect the government's decision-making. For example, the low interest rate policy is the root cause of many economic behaviors that twist and turn in China's economic life at present. However, because the CPI is too low, or the domestic CPI has been kept at the lowest level in history, the low interest rate is bound to jeopardize the interests of creditors and benefit debtors. The low domestic interest rate policy has also become one of the major sources of overheated domestic fixed investment and rapidly rising asset prices. \r\n \r\n In conclusion, the co-existence of international customary and non-international customary (i.e., selective international customization based only on one's own needs) in the determination of China's CPI has made the determination of the CPI non-transparent, non-scientific and non-standardized, and influencing the government's decision-making with such data will inevitably distort a series of economic behaviors. Here, I suggest that the government departments in the establishment of the CPI, either all international customization, or according to the actual situation in China to design a set of CPI index can reflect the consumption behavior of Chinese residents, in order to provide good economic information and data for our enterprises, residents and the government.