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By Fu Jing (China Daily)
Updated: 2008-01-18 09:38

Provincial governments will get more flexibility in pricing everyday goods under an NDRC policy announced yesterday.

The National Development and Reform Commission (NDRC) policy comes after the central government began intervening in six categories of everyday goods on January 15, amid rising inflationary pressure.

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"Local governments can take flexible measures to decide which items should be monitored and controlled," Zhou Wangjun, deputy director of the NDRC's pricing department, said yesterday.

Provincial governments have been urged to monitor and control prices of grain products, edible oil, pork, beef, mutton, milk, eggs and liquefied petroleum.

"They can add more items to the list or delete some in line with their own situation," said Zhou. "The provincial governments have a better understanding of their local markets."

The nation is facing rising prices in many areas, which has driven the CPI higher by over 6 percent in five consecutive months.

The edible oil price has risen an average 58 percent year-on-year in November, while pork, beef and mutton have increased 48 percent, 46 percent and 51 percent compared with the same period last year.

Zhou said prices would continue rising for some time, even with intervention. "All the measures are temporary and the basic solution is to ensure supply of necessities."

The measures follow a revised regulation against price manipulation. The new rule, effective from Sunday, raises the maximum fine to 1 million yuan ($137,931) - almost triple the old penalty - for those who manipulate market prices and ignore government advisories.

The State Council and local governments can set profit ratios or price ceilings for key goods and services when prices rise too sharply, under the new rule.

As Spring Festival draws near, the central government has urged all Party and government heads to stabilize prices in their regions.