China controls commodity prices in bid to halt inflation

Business News

Jan 16, 2008, 11:24 GMT

Beijing - China on Wednesday announced measures to control the prices of key commodities amid concerns that rising inflation was affecting social stability. The government ordered all large producers of grain, edible oil, meat, milk, eggs and liquefied petroleum gas to seek permission before raising prices, warning that it would not approve any 'unreasonable' hikes. The temporary measures were imposed because 'unreasonable price raising has affected social stability,' the National Development and Reform Commission said on its website. The measures were a response to soaring prices of goods such as pork and cooking oil in recent months, and designed to prevent some businesses continuing to exploit the rising prices, the commission said. Wholesalers and retailers were also required to seek permission before introducing large price rises, it said. China's consumer price index soared by 6.9 per cent in November, with continuing rises in oil and food prices pushing it to the highest rate for more than a decade. Inflation hit 4.6 per cent in the first 11 months of last year, the highest rise since 1997. Chinese leaders said last month that they would take tougher measures to curb inflation and overheating, amid signs that current policies have failed to slow the country's rampant economic growth. The government has set its primary task for this year as preventing overheating and avoiding a 'shift from structural price rises to evident inflation.' It plans to spend more on social security, health care, education, housing and allowances for people on low incomes next year, state media said. © 2008 dpa - Deutsche Presse-Agentur

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