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Business / Economy

China lifts price controls on 24 commodities, services

(Xinhua) Updated: 2015-01-04 22:01

BEIJING - China will lift controls on prices of 24 commodities and services, said the National Development and Reform Commission (NDRC) on Sunday.

Market will decide the price of tobacco leaves, the last agricultural product to be freed from government price control, said a statement on the commission website.

The NDRC said businesses will be allowed to decide how much they want to pay for tobacco leaves, but a minimum price will be set 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 far behind changes of road and water transportation prices, which has impeded the development of the railway sector, 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 activate the market, attract more private investment and enhance the competitive edges 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.

The NDRC will prevent high price volatility and keep a close eye on market order after controls are lifted.

 

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