Price regulation fund will curb excessive increases for food
By Wang Yanlin and Richard Fu |
January 17, 2011, Monday
|
Print Edition
Print Edition
SHANGHAI aims to launch a price regulation fund this year to help stabilize prices and ease inflationary pressure, a government official said.
The city will replenish the fund, which will subsidize producers to keep prices low, with its own fiscal income, said Wu Jianrong, deputy director of the Shanghai Development and Reform Commission. He declined to specify the size of the planned fund.
"Charging producers may again push up consumer prices, and tapping the government budget will avoid this problem," Wu said ahead of the annual session of the Shanghai Committee of the Chinese People's Political Consultative Conference as his agency took proposals from CPPCC members.
Tu Haiming, a municipal CPPCC member and president of a property firm, called on Shanghai to establish such a fund soon to tame spiraling inflation.
Shanghai's consumer price index, the main gauge of inflation, jumped to a yearly high of 4.3 percent in November, led by a 10.9 percent surge in food costs.
Shanghai has introduced a slew of measures to stabilize food prices including subsiding farmers to increase supply and reducing road tolls for vehicles carrying fresh produce.
"These measures are all temporary administrative interventions, or short term measures," Tu's proposal said.
As vegetable price increases usually occur in periods prior to major holidays and in bad weather, these short-term measures are often not a cure, he said.
"What we need is a long-term effective mechanism," he said, referring to the price regulation fund.
Wu said this year's inflationary pressure will be "rather high" for Shanghai because of a relatively lower comparative base a year earlier and costly basic commodities on the global market. "Food costs may remain at a high level for a while," Wu said.
For the whole of 2011, Shanghai will check its inflation under the national target of 4 percent, he said.
Other CPPCC members also offered proposals to help Shanghai counter rising food costs and inflation.
Wang Liang, a researcher with the municipal government's Development Research Center, said the government should lead an effort to rebuild a number of nonprofit food markets.
Li Xin, director for economy studies at the Shanghai Institutes for International Studies, said the city government should cancel public hearings planned for 2011 regarding price adjustment for utilities.
Chang Qing, the financial chief of Shanghai Huayi (Group) Co, said in his proposal that state-owned companies should be required to pay more dividends to return to society.
The city will replenish the fund, which will subsidize producers to keep prices low, with its own fiscal income, said Wu Jianrong, deputy director of the Shanghai Development and Reform Commission. He declined to specify the size of the planned fund.
"Charging producers may again push up consumer prices, and tapping the government budget will avoid this problem," Wu said ahead of the annual session of the Shanghai Committee of the Chinese People's Political Consultative Conference as his agency took proposals from CPPCC members.
Tu Haiming, a municipal CPPCC member and president of a property firm, called on Shanghai to establish such a fund soon to tame spiraling inflation.
Shanghai's consumer price index, the main gauge of inflation, jumped to a yearly high of 4.3 percent in November, led by a 10.9 percent surge in food costs.
Shanghai has introduced a slew of measures to stabilize food prices including subsiding farmers to increase supply and reducing road tolls for vehicles carrying fresh produce.
"These measures are all temporary administrative interventions, or short term measures," Tu's proposal said.
As vegetable price increases usually occur in periods prior to major holidays and in bad weather, these short-term measures are often not a cure, he said.
"What we need is a long-term effective mechanism," he said, referring to the price regulation fund.
Wu said this year's inflationary pressure will be "rather high" for Shanghai because of a relatively lower comparative base a year earlier and costly basic commodities on the global market. "Food costs may remain at a high level for a while," Wu said.
For the whole of 2011, Shanghai will check its inflation under the national target of 4 percent, he said.
Other CPPCC members also offered proposals to help Shanghai counter rising food costs and inflation.
Wang Liang, a researcher with the municipal government's Development Research Center, said the government should lead an effort to rebuild a number of nonprofit food markets.
Li Xin, director for economy studies at the Shanghai Institutes for International Studies, said the city government should cancel public hearings planned for 2011 regarding price adjustment for utilities.
Chang Qing, the financial chief of Shanghai Huayi (Group) Co, said in his proposal that state-owned companies should be required to pay more dividends to return to society.
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