China lifts curbs on material prices
Print Edition
CHINA will lift controls on prices of 24 commodities and services, according to the National Development and Reform Commission.
The market will decide the price of tobacco leaves, the last agricultural product to be freed from government price control, the NDRC said in a statement on its website.
The NDRC, China’s top economic planning agency, said businesses will be allowed to decide how much they want to pay for tobacco leaves, but a minimum price will be imposed to protect farmers.
China began to liberalize the farm produce market in 1978, and tobacco is the last remaining controlled price.
The government has retained its regulatory role through state storage programs, by maintaining minimum prices and giving subsidies on some products.
Prices of railway bulk cargo, parcels and privately funded cargo and passenger transport will also be allowed to float.
Railway passenger and cargo prices have been decided by the government, but lag behind changes in road and water transport prices, which has impeded the development of the railways, said Sun Zhang, a professor with Tongji University.
In April, rail freight prices were freed up on the Zhunchi Railway, a short private railway in north China, as a pilot.
Shi Lixin, a researcher at the Institute of Economic Systems and Management under the NDRC, said the pilot had shown that private investors could participate in railway construction and set an example for price reform.
Prices of domestic air cargo will be freed, as well as prices of passenger transport of some airlines.
Wu Tongshui, deputy director of China Air Transport Association, said the move will help spur the market, attract more private investment and enhance the competitive edge of carriers.
Limits will be removed on port service fees, including fees on container loading, ship rubbish treatment and water supply.
Limits will be removed on factory prices of explosives for civil use.
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