Despite domestic price increases, China's low labor cost has helped stabilize export prices. Chinese textile products, for example, have even witnessed price cuts on the world market.
To curb domestic price hikes, Wen announced a series of measures, including expanding production of grain, meat and other consumer goods, restricting industrial use of grain and grain exports, increasing import of consumer goods in short supply and aiding the low-income population.
Provincial governors and mayors will be held responsible for grain and nonstaple food supplies, according to Premier Wen.
Lin Zhelong, a NPC deputy from the eastern province of Fujian, said he and his fellow peasants pinned hope on the government's macro regulation. "We have clearly felt the pressure of price hikes, and certainly hope the situation won't get worse."
Many political advisors and lawmakers attending the ongoing annual parliamentary session voiced calls on the government to protect the interests of low-income earners, who are affected most by the growing inflation.
A recent survey on the urban families' income levels indicates that the average disposable income of the poorest 10 percent of urban families grew by 6 percent between 2001 and 2006, compared with a 15-percent rise for the richest 10 percent of families surveyed.
The income rise for the poor families, however, was nullified by last year's 4.8 percent CPI rise, particularly the 11 percent price hike for food, as they had to spend 60 percent of their income on food, compared with 20 to 30 percent for the rich families.
"Premier Wen dedicated a considerable portion of his report to price controls and macro regulation," said NPC deputy Wang Xianrong. "We need to see how these measures are implemented to tell whether they are effective."
The People's Bank of China, the central bank of the country, has said it will keep the tight monetary policy unchanged to rein in growing inflation.
The central bank had taken a series of measures such as raising the reserve requirement ratio 11 times and the benchmark interest rates six times since last year to absorb excess liquidity and the measures had played a positive role in slowing down the inflation growth.
(Xinhua News Agency March 5, 2008)