China works to curb 'structural price rise'
Updated: 2008-01-30 20:32
BEIJING -- China's government should continue taking measures to prevent "structural price rises" from becoming "obvious inflation", said Wang Yiming, an expert with the National Development and Reform Commission (NDRC).
Wang, vice president of the Macro Economy Research Institute of the NDRC, described recent price hikes as within an "acceptable" range compared with international levels, because it was less than five percent and other countries had also seen big CPI rises last year.
Surge in prices of staples such as pork, cooking oil and grain since May 2007 lifted the country's consumer price index (CPI) to 4.8 percent in 2007, well above the government's three-percent target set at the beginning of last year.
In November when China saw a CPI rise of 6.9 percent, the highest in 11 years, the CPI increase in Russia was 11.1 percent, Vietnam 10 percent, Indonesia 6.7 percent, India 5.5 percent, US 4.3 percent, Brazil 4.2 percent year on year, mainly pushed by energy, resources and foodstuff prices.
"Easing inflationary pressures needs a process and price rises will continue for some time this year," Wang said.
The government should tighten price supervision of daily necessities and provide assistance to low-income families to ride out the price rises.
Wang also suggested that the government should strengthen tracking and research of global prices of grain, energy and other important products to facilitate the decision making in domestic macroeconomic controls.
The NDRC, China's top economic planner, in mid January announced price caps on a range of products, including grain, edible oils, meat, milk, eggs and liquefied petroleum gas.
Food producers were required to get government permission for any new price hike. Last week, the government extended the order to fertilizer prices in order to cushion the impact on farmers.
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