At the 2006 annual meeting of the Chinese Society for the Study of American Economics and the founding conference of the Institute of Advanced Study of Shanghai University of Finance and Economics, Qiu Xiaohua used the term “scissors difference†to summarize the difficulties of increasing income for enterprises and farmers. The first is the “scissors gap†between the ex-factory price of industrial products and the increase in the purchase price of raw materials: the ex-factory price increase of industrial products was only 2.6%, which was much lower than the 5.9% increase in the purchase price of industrial raw materials, which led to the cost of the enterprise. An increase of more than 100 billion yuan. Although the corporate profit of the country has increased by 25.5% in the first five months, more than 80% of new profits have been concentrated in the five major industries such as petroleum, electricity, coal, and non-ferrous metals, while more than 30 other industries have shared less than 20%. Profit, this shows that the vast majority of companies are actually on the verge of losing profits or losses. Another is the “scissor gap†in the increase in the prices of agricultural products and agricultural materials. The price increases for agricultural plastics, pesticides, diesel, and seeds are double-digit, while the increase in the prices of agricultural products is only 1% to 2%. In 2005, the average per capita consumption of farmers exceeded 100 yuan. At the same time, the government’s per capita government subsidy for farmers and the reduction or exemption is only 42.4 yuan.
However, Qiu Xiaohua believes that the aforementioned hidden worries are not enough to affect the overall situation of economic operation. In 2006, the steady and relatively rapid growth of the Chinese economy has been determined. Because the effectiveness of macro-control has been sustained, low inflation has created a loose environment for macroeconomic development. In addition, the enthusiasm for accelerating development in various regions is high, and the administrative driving force for China’s economic growth is strong, and it also supports high growth in investment and production.
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