China will tighten prices of certain goods including medicine and property as part of measures to stabilize a market which has been rocked by surging price rises, said the National Development and Reform Commission.

 

"China will face a rather arduous task to cope with inflation pressure next year, driven by rising global prices, robust domestic demand, higher costs for using environmentally friendly resources," said Bi Jingquan, vice director of the nation's top planning body, according to a statement on its website.

 

But the country's good harvests in recent years and the substantial increase of fiscal revenue will help ease the pressure, said Bi.

 

According to the statement, China will ensure that overall prices do not rise too fast. It will improve supervision, guiding production, supplies and market distribution of basic necessities.

 

The country will offer a preferential price for purchases of wheat and rice from farmers to guarantee market supply and provide subsidies for sectors badly hurt by price increases of power, crude oil and natural gas.

 

China's consumer prices in October climbed 6.5 percent, the highest pace in more than a decade while they widened to more than six percent in August and September.

 

The producer prices, a gauge of factory-gate inflation, rose 4.6 percent last month from a year earlier, the highest in more than two years. The previous record was 5.9 percent in May 2005.

 

China's fiscal revenue may expand by 27.23 percent to more than five trillion yuan (US$675.7 billion) this year, estimated Yao Jingyuan, chief economist with the National Bureau of Statistics.

 

(Shanghai Daily December 11, 2007)