1. Report Industry Investment Rating - No information provided in the report. 2. Core Viewpoints of the Report - Based on historical data from 2005 to 2026, the crude oil price has a significant impact on China's PPI trend, with a correlation coefficient of 0.78, while its impact on CPI is much weaker, with a correlation coefficient of only 0.21 [1]. - If the oil price remains at the current high level, China's PPI year - on - year may turn positive rapidly in March. If the geopolitical conflict pushes the average oil price to $100 - 150 per barrel, the PPI year - on - year is expected to climb to the range of 2.3% - 6.7% [1]. - Two scenarios of oil price changes are discussed to analyze the future macro - policy directions: when the oil price continues to rise, the focus of macro - regulation should shift from demand - side stimulation to supply - side cost relief and structural optimization; when the oil price rises and then falls, the policy will focus on boosting effective domestic demand [2][3]. 3. Summary by Relevant Catalogs 3.1 Comparison of the Impact of Crude Oil Price on PPI and CPI - The industries related to the crude oil chain account for about 14% of the PPI. Although the weight is not large, the price fluctuation is significant, and its marginal contribution to PPI cannot be underestimated [7]. - From 2005 to 2026, the correlation coefficient between Brent crude oil price year - on - year and China's PPI year - on - year is about 0.78, showing a strong correlation. The correlation coefficient between CPI and oil price is only 0.21, indicating a weak positive correlation. The transmission of oil price to CPI has a time lag, and food price fluctuations, especially pork price, have a greater impact on CPI [7]. 3.2 Preliminary Calculation of the Impact of Oil Price on China's PPI - Based on the price changes of the five major PPI sectors (coal, oil, non - ferrous metals, ferrous metals, and chemicals) as of March 6 (oil price at $83, a 12.3% year - on - year increase), it is estimated that the PPI in March will be 0.09%, turning positive year - on - year for the first time since October 2022, and the annual average PPI will be 0.68% [10]. - According to the regression calculation of PPI year - on - year and Brent oil price year - on - year since 2005, a 10% increase in oil price will lead to an approximate 0.66 - percentage - point increase in China's PPI. If the average future crude oil price rises to $100 - $150 per barrel, the corresponding PPI reading will rise to 2.3% - 6.7% [11]. 3.3 Impact of "Re - inflation" on Macro - policy Scenario 1: Continuous rise in crude oil price and significant increase in domestic and foreign inflation pressure - The sharp rise in oil price will have a profound impact on the global economy and monetary policy. Externally, external demand may be further suppressed, and the Fed's interest - rate hikes will push up the US dollar index, causing spill - over depreciation pressure on the RMB. Domestically, the economy is still affected by debt reduction and the deep adjustment of the real estate market, and the input - type inflation pressure may drive up prices but damage residents' consumption ability. In this context, the risk of "stagflation" may be significantly greater than that of "inflation" [2][15]. - Facing the structural problem of "inflation" upstream and "coldness" downstream, the core idea of macro - regulation should shift from demand - side stimulation to supply - side cost relief and structural optimization. Fiscal policy will play a key role, and tax policies for some enterprises may be relaxed. Monetary policy mainly plays a role in coordinated easing, and the use of re - loans, re - discounts, and some targeted structural monetary policy tools may be more active, while the space for comprehensive reserve requirement ratio cuts and interest - rate cuts may be restricted [16][17]. Scenario 2: Crude oil price rises and then falls, and the policy still focuses on boosting effective domestic demand - Based on the current commodity prices, the PPI in April may turn positive to over 1%, and the PPI for the whole year will still maintain a moderate increase. The policy will focus on boosting domestic consumption and investment demand. Fiscal policy will ensure the expenditure intensity, and monetary policy will continue the moderately loose tone. The possibility of flexibly using structural monetary policy tools is greater than that of comprehensive reserve requirement ratio cuts and interest - rate cuts [3][18].