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Prices take largest jump since 1997
By Qin Yan (China Daily)
Updated: 2004-12-07 22:15

Consumer prices in China are expected to grow by 4 per cent this year, the highest spike since 1997.

The National Development and Reform Commission said the price jump had begun to slow down in October and will continue to fall, the China Business Times reported.

The trend is a result of stable prices of foodstuffs, meat, egg and milk, the commission said.

Both the possibility of higher average prices for wheat, corn and paddy and that of a price slump are slim.

Meanwhile, the supply and demand of most commodities remains unchanged.

According to a survey of 600 major commodities, conducted by the Ministry of Commerce, all of them could meet the current demand.

Given the current fierce competition in the market and technology advances, the prices of major commodities should tend to decline.

In addition, the impact of last year's price hikes is vanishing. The price hike last year mainly occurred in the fourth quarter and it very much affected prices in the first three seasons of this year.

With that impact fading away, the fourth season will see an obvious fall in the growth rate of prices in comparison to the first three seasons.

But the commission also pointed that there are still problems with the movement of consumer prices in the country, reported the newspaper.

A major one is that there is still tension between the supply and demand of coal, power, oil and transport, putting upward pressure on prices.

The other problem is that high energy and raw material prices will push up prices of other products.

Price hikes this year have made life more expensive," said Beijing resident Liu Jing.

"I wish prices would start falling," she said.

"Although the rise of prices of commodities like edible oil and electricity does not seem too much, it does affect daily life once you count it carefully because you need such things every day," she said.

And climbing fuel prices have made Liu and her boy friend reluctant to buy a car.

"We have to wait and choose one that is fuel efficient," she said.

According to a report from the China News Service, the commission will take a series of measures to ease the tension in the supply of coal, power, oil and transport.

Statistics from the first 10 months of the year show that the price of oil and oil products rose 10.5 per cent over the same period last year, while the price of coal climbed 13.4 per cent.

The commission called on relevant departments to boost supply to meet demand from important regions, sectors and enterprises.

The price of coal and power will be kept stable and outdated industries will be limited so that unreasonable demands for coal, power, oil and transport is lessened.

The market system and macro-controls should be given full play so that the supply of key commodities in the country is sufficient and prices remain stable.

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