According to a national economic and social development report, the consumer price index (CPI) is expected to continue to rise by less than 4 percent in 2005.

Supplies of coal, electricity, petroleum and transportation are still tight and the cost of the means of production remains high. This "will put upward pressure on the prices of downstream products and could gradually affect the prices of consumer goods," said the report.

The report on the implementation of the 2004 plan and the 2005 draft plan for national economic and social development was submitted to lawmakers attending the ongoing Third Session of the 10th National People's Congress, the top legislature, on Saturday for approval.

High prices for petroleum and raw and processed materials in the international market will also cause prices to rise in the domestic market, it said.

A number of price problems have arisen in public utilities and service industries because some local authorities postponed adjusting prices on some items last year, said the report, adding that progress in the reform of factors of production such as capital and land and increases in pay scales will also help to drive up the CPI.

The government will continue to strengthen and improve macro regulation, appropriately control money and credit, and curb the excessively rapid increase in fixed asset investment, which will help check the rise in the costs of means of production, according to the report.

It also predicted that the ripple effect from last year's price increases will be relatively small this year.

"This comprehensive analysis of factors affecting price levels shows that this year's projected rise in the CPI should be about the same as last year's actual rise," the report said.

(Xinhua News Agency March 7, 2005)