The government should upgrade measures to deal with issues
caused by the rise in prices of goods, says an article in
Market News. The following is an excerpt:
The macro-control measures taken by the government to check
excessive price rises of goods was necessary to ease public
anxiety. But more importantly, we should find out the real factors
that led to the present price hikes, and find more effective ways
of handling such problems.
In the past, China concentrated more on how to basically feed
and clothe its people. So the quantity of agricultural products was
the main concern. Agricultural development had long been held as an
appendage to industrial development. This type of thinking was
correct at the time. After many years of great efforts, China has
mostly solved the poverty problem and the public now demands better
food quality. This demand has pushed up prices for seeds and grains
and hence, food prices.
The increase is in fact a normal response to market demand and
better protects the interests of farmers.
The rise in food prices last year compelled farmers to produce
more. It was good for farmers. But we should also see that middle
and low-income families do not become the victims of price rises.
Some urban residents reduced their consumption of meat products
while other lowered their living standards.
The current price intervention measures by the government are
necessary, but they are only temporary. The government should
introduce long-term measures that reduce inflation caused by
overall price rises.
Toward this end, two aspects need to be looked at. First, the
government should increase the subsidies to low-income families to
help them fend off price rises, especially for daily
necessities.
Second, the government should improve the distribution system
and raise the income of middle and low-income families. As long as
we can deal with these issues, price rises can be tolerated.
(China Daily January 29, 2008)