Local governments must work to keep prices of consumer goods and
services basically stable, according to a circular issued by the
National Development and Reform Commission (NDRC).
"If the year-on-year consumer price index growth for an area
hits four percent and lasts for three consecutive months, the local
government should not raise any prices in the following three
months, including parking tickets, water and so on," said an
official with the NDRC.
The rule will also apply when the month-on-month CPI growth
surpasses one percent.
"Unhealthy factors are still bothering China's economy,
including the pinched power supply and inadequate transportation,"
said the official. "Price hikes of raw materials have started to
have an effect on the prices of consumer goods."
NDRC Deputy Secretary General Cao Yushu said at a forum last
week that the agency will not raise electricity and gasoline prices
if nationwide CPI growth hits four percent.
China set the goal at the beginning of this year to keep CPI
growth within four percent. The CPI in the first two months of 2005
rose 2.9 percent year-on-year.
The NDRC also currently requires local governments to keep track
of price fluctuations of important consumer goods, including grain,
chemical fertilizer, oil products, coal, steel and housing.
(Xinhua News Agency April 5, 2005)