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China rolls out measures to fight inflation

English.news.cn   2010-11-21 15:30:04 FeedbackPrintRSS

BEIJING, Nov. 21 (Xinhua) -- The State Council, China's cabinet, announced Sunday a slew of measures to rein in rising commodity prices to ease the economic pressures on the people.

Local governments and departments are required to boost agricultural production and stabilize supply of agricultural products and fertilizer while reducing the cost of agricultural products and ensuring coal, power, oil and gas supplies, the State Council said in a seven-page circular.

The cabinet urged local departments to step up vegetable-planting efforts while stabilizing winter vegetable production and strengthening grain and edible-oil production field management to ward off supply shortages.

To reduce delivery costs, road tolls for vehicles transporting fresh- and live-farm produce will be forbidden from Dec. 1, the circular said.

The cabinet also ordered local authorities to continue to reduce the prices of power, gas and rail-transport for chemical-fertilizer producers while ensuring coal supplies for power generation companies and increasing production of oil -- especially diesel -- to guarantee sufficient supply.

Local governments must temporarily disburse subsidies to needy people and increase allowances for poor students and student canteens, the circular added.

Local authorities were ordered to establish coordinated social-security mechanisms that promise a gradual rise in basic pensions, unemployment insurance and minimum wages.

Local departments were also ordered to adjust prices promptly and to impose temporary price controls on important daily necessities and production materials where necessary.

Market monitoring will be intensified to clamp down on hoarding and speculation in major agricultural products, the circular added.

Chinese decision makers have made price controls a top priority, as the consumer price index (CPI), the main gauge of inflation, rose to a 25-month high of 4.4 percent in the 12 months to the end of October. The hike was mainly due to a 10.1-percent surge in food prices. Food prices have a one-third weighting in China's CPI calculation.

China has been moving to mop up excessive liquidity to combat inflation, with the latest move to target over-liquidity in the banking system.

The People's Bank of China, or the central bank, said Friday it would raise capital reserve requirements by 50 basis points for all the banks of the country for the fifth time this year to control credit and liquidity.

Related:

China's cabinet orders local governments to take measures to rein in surging food prices

BEIJING, Nov. 20 (Xinhua) -- The State Council, China's cabinet, Saturday ordered local governments and departments to take further measures to battle rising prices.

Local governments and departments must boost production and ensure supply while checking irrational demand and punishing illegal activities that push prices up, a circular on government website www.gov.cn said. Full story

China to increase grain supplies to combat inflation

BEIJING, Nov. 19 (Xinhua) -- The Chinese government will increase grain supplies to meet people's needs and stabilize market prices, the nation's grain authorities said Friday.

The government will also sell a set amount of cooking vegetable oil and soybeans from its reserves beginning next week, in addition to the weekly policy-oriented sales of wheat, rice and corn that has already begun, the State Administration of Grain said in a statement posted on its website Friday. Full story

China's consumer inflation to rise 3.8% in Q4: think tank

BEIJING, Nov. 19 (Xinhua) -- China's consumer price index (CPI), the main gauge of inflation, will rise 3.8 percent in the fourth quarter, the State Information Center (SIC) forecast Friday.

In a report in China Securities Journal, the SIC, a National Development and Reform Commission (NDRC) think tank, said the whole-year CPI is likely to slightly exceed the government's target of 3 percent, but still "within tolerance of the society". Full story

China announces to raise banks' reserve requirement ratio by 50 basis points

BEIJING, Nov. 19 (Xinhua) -- China's central bank Friday ordered banks to set aside an additional 0.5 percent of their deposits from Nov. 29, the fifth such hike this year and the second increase this month.

The People's Bank of China said the move was aimed at "enhancing liquidity management and moderately regulating credit supply." The increase was estimated to freeze liquidity of about 300 billion yuan (44.8 billion U.S. dollars). Full story

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Editor: Mo Honge
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