China readies price controls as it tries to tackle rising food inflation

CHINA will unveil food price controls and crack down on speculation in agricultural commodities to contain inflationary pressure that its central bank governor highlighted as a risk yesterday.

With consumer prices rising at their fastest pace in more than two years, the National Development and Reform Commission, the country’s top planning agency, is preparing a “one-two punch” of actions to rein in food costs, official media reported.

Such direct intervention would mark an escalation of the government’s efforts to tame inflation and underline its worries over the rapid run-up in food prices.

Possible steps include price controls, subsidies for shoppers, a crackdown on hoarding and price gouging as well as a system whereby mayors are made responsible for a basket of food items, the China Securities Journal reported. Those found speculating on corn or cotton will also be punished severely, it added.

Consumer price inflation sped to a 25-month high in October, with prices rising 4.4 per cent from a year earlier. Food, which makes up about a third of China’s consumer price index, led the way, climbing 10.1 per cent. Non-food items increased just 1.6 per cent.