China's continuous efforts to battle inflation

 

Xinhua, February 27, 2011

Chinese Premier Wen Jiabao told Internet users Sunday that he would not allow the consumer prices to surge unchecked in the country.

The consumer price index (CPI), a major gauge of China's inflation, rose 4.9 percent in January from a year earlier as food prices increased 10.3 percent due to strengthening demand and a drought in key grain-growing regions.

The CPI rose by 4.6 percent in December and 5.1 percent in November, a 28-month high.

Following are the latest policies and measures the Chinese government has implemented to contain inflation:

Monetary policy:

To curb the rising inflation, China has announced to shift to prudent monetary policy in 2011 from previous moderately loose monetary policy.

On Feb. 24, the People's Bank of China (PBOC), or the central bank, hiked commercial banks' reserve requirement ratio (RRR) for the second time this year, after this year's first increase in the benchmark interest rates. Last year, the PBOC raised the RRR for commercial banks six times and hiked the benchmark interest rates twice.

Other anti-inflation measures:

Raising the minimum purchasing prices for grain in 2011 by up to 21.9 percent from 2010 levels to boost stockpile and increase production;

Allocating 4 billion yuan (606 million U.S. dollars) for rural water conservation projects, with more funds in arrangement depending on the development of drought;

Selling government reserve of grain, oil and sugar on the market to ensure supply;

Intensifying crackdown on price speculation and punishing those found hoarding commodities and pushing up prices by illegal means;

Urging local authorities to offer temporary subsidies to needy families and groups;

Opening "green channels" for farm produce transportation -- vehicles transporting farm produce, such as potatoes, sweet potatoes, corn, and peanuts, will not have to pay tolls at roads and bridges, starting from December.