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)