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Government price intervention legally based

(Xinhua)
Updated: 2008-01-26 10:52

The temporary price intervention policies taken by the Chinese government are both legal and common practices in mature market economies, the People's Daily, the mouthpiece of the Communist Party of China, said in a commentary Friday.

The commentary came after criticisms which challenged the legitimacy of the government move.

The newspaper said it is the bounden duty for the government to maintain food supply, ease the soaring prices and ensure people a stable and enjoyable life.

Surges in prices of staples such as grain, pork and edible oil since May 2007 have lifted the consumer price index (CPI) to 4.8 percent in 2007, and an 11-year high of 6.9 percent in November, well above the government's three-percent target.

"People's lives, particularly those of the have-nots, have been affected by the price rises. Under these circumstances, the central government launched the interim price intervention in a move to curb irrational price rises, regulate the market and sooth the inflation fear," said the commentary.

In addition, Article 30 of the Price Law was quoted to prove that the intervention carried out by the National Development and Reform Commission, the country's top planner and regulator in economic affairs, is proper and legitimate in both theory and procedure.

"The State Council and the governments at provincial levels can intervene on prices through setting a limit in price discrimination and margin rates, requiring the enterprises to submit price-raising scheme to the government for official approval and implementing a put-on-record system," the law stipulated.

The commentary said the Chinese government respects the law of the market and emphasized the price intervention is aimed at irrational price-raising practices, such as hoarding and cornering, spreading fabricated information and disrupting the market order.

Similar price intervention policies were also taken by other governments like France in 1986 and Japan in 1973, the newspaper said.

The commentary said the price control policy has been hugely welcomed by the people.

"It is time to implement price control," "The irrational price rises shall be stopped," "The price intervention would help us out of the price panic," some people were quoted by the paper as saying.


(For more biz stories, please visit Industry Updates)



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