China intervenes in commodity prices
Updated: 2008-01-18 14:11
China's top economic planner has announced price controls on a package of products, including grain, edible oil, meat, milk, eggs and liquefied petroleum gas, Xinhua learned Wednesday from a work conference of the National Development and Reform Commission (NDRC).
"Major enterprises are required to submit the price-raising scheme to the government for official approval 10 working days before they intend to raise the prices," said the NDRC in a circular on interim price intervention. The move is believed to be a bid to tackle inflation.
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Official statistics revealed that edible oil, pork and beef prices in early January in 36 large and medium-sized cities nationwide surged 58 percent, 43 percent and 46 percent respectively year on year.
The government should notify the enterprises within seven work days after it gets the applications from the enterprises whether to approve or reject the schemes on the basis of whether the price rise range is reasonable, noted the circular.
The NDRC said big wholesalers and retailers were required to report to the government about the sales conditions within 24 hours when prices were raised by more than 4 percent in one price rise, or raised several times by more than 6 percent within 10 days, or incrementally by more than 10 percent in 30 days.
The price and market regulation agencies have the right to ask the enterprises to return the prices to normal or reduce the price rise range if they regard the rise as unacceptably large.
In the interim price intervention period, enterprises should report to the government if they intend to raise prices. Those enterprises that do not file reports to the government when raising the price or raising the price ahead of the approved schedule would be punished by the government, said the circular.
The NDRC was keen to point out that price intervention measures were not equal to a price freeze or interfering with the enterprises' autonomy in setting the price. This move was targeted at those commodities that were closely related to people's daily life and which have experienced galloping price rises recently.
"When the surging prices of some commodities becomes stable, the government will lift interventions in a timely manner," added the circular.
The NDRC also released the first batch of 12 big enterprises and wholesalers required to apply for official approval for price rises. They include China's leading instant noodle manufacturers such as Ting Hsin International Group, Uni-President and Baixiang Food, and the dairy giants such as Yili, Mengniu, Bright Dairy and Food and Sanlu.
The country's leading edible oil producers such as the China Oil and Food Corporation and Luhua Group are required to submit their price-raising scheme when they intend to raise the small-packaged edible oil prices, according to the NDRC.
The NDRC said more enterprises would be added to the list.
The recent clampdown on illegal pricing has helped to bring down liquefied gas retail prices by 19 percent in major Chinese cities, said the NDRC on Tuesday.
The price control measures are temporary, reasonable and in compliance with the country's price law, said Cao Changqing, director of the pricing department under the NDRC.
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