The government will introduce a range of temporary
price-intervention measures in a bid to stabilize the cost of daily
necessities, a State Council executive meeting said yesterday.
According to the meeting, large-scale producers of such products
must seek government approval before imposing any price
increases.
Similarly, large-scale wholesalers and retailers that want to
raise prices will first have to notify the government.
The State Council has not yet specified what the products are,
or when the measures will be introduced.
The country's Price Law stipulates that the State Council can
temporarily freeze prices or centralize the price-setting power on
part of or the whole market if the prices undergo strong
fluctuations.
The prices of the country's major foods, including grain, pork
and cooking oil, surged last year, lifting the consumer price index
to an 11-year high of 6.9 percent in November, well above the
government's target of 3 percent.
Despite a secure supply, China still faces the prospect of
further price hikes as the global prices of crude oil and food
surge, the State Council said.
It also ordered a halt to any price rises in crude oil, natural
gas, electricity, water, heating, public transportation, education
and healthcare.
Pledging to crack down on market manipulation or hoarding, the
central government will also arrange special campaigns to oversee
local authorities in stabilizing prices ahead of the festive
season.
According to the State Council, attempts are also being made to
revise a regulation to curb illegal price fixing, which will impose
heavier punishments on industry associations found guilty of
manipulation.
Cheng Guoqiang, deputy director of the Market Economy Institute
with the Development and Research Center of the State Council said:
"The measures aim to regulate market order, stabilize price
expectations and ensure a healthy and normal market."
"Due to its wide coverage, price rises in the daily necessities
market, especially the grain sector, might magnify and spread to
other sectors," he said.
"Therefore stable prices in these sectors are key for the
stability of the market as a whole."
Cheng said the measures are systematic, taken after key
government meetings held last year set the tone of "preventing
economic growth from evolving from rapid to overheating and
preventing price hike shifts from going from structural to
inflationary".
(China Daily January 10, 2008)
