Subsidies and supplies to help fight inflation

CHINA will give subsidies to needy people and boost commodity supplies among other measures aimed at stabilizing market prices and easing the pressure of inflation, the National Development and Reform Commission announced yesterday.

Train fares will not rise during the forthcoming Spring Festival and bus fares can only fluctuate within a certain range, the nation's top planner said.

"The government attaches paramount importance to the influence of recent surging consumer prices on people's lives. Premier Wen Jiabao has demanded that government officials at all levels regard taking care of needy people as a priority," said the NDRC in a statement.

Local governments are asked to continue to raise pensions for retired people, with an increase much higher than the previous average standard of 80 yuan (US$10.6) each month. The payment will be raised on January 1 instead of July 1 as has been the practice.

Local governments will also increase subsidies to people receiving subsistence allowances. For needy citizens not eligible for the allowance, governments should offer temporary subsidies to help them cope with soaring consumer prices.

China's consumer prices in October climbed 6.5 percent, the highest rate in more than a decade, together with two increases of above six percent in August and September.

The rate of inflation has drifted far from the central bank's target of keeping it below three percent for the entire year, mainly because of uncurbed increases for food.

Prices of pork soared 54.9 percent in October compared to a year ago while meat and poultry prices jumped 38.3 percent. The cost of cooking oil also rose 34 percent, according to the National Bureau of Statistics.

"Although China still faces great pressure from price rises in the near future, the central government is taking measures to stabilize the market supply of commodities including pork, edible oil and vegetables to ease the pressure of inflation," said the statement.

The NDRC estimated the market will observe a great boost in the supply of pork from the second half of next year after the measures begin to take effect.

The measures include controlling piglet fodder prices and increasing subsidies for piglet farmers to boost their profit margins and ultimately lift the amount of pork available in the market.

According to the statement, the NDRC will also guide the China Petrochemical Corp and China National Petroleum Corp in bringing the nation's restricted fuel supplies back to normal.

China raised retail fuel prices by up to 10 percent from November 1, mainly due to worldwide increases.

The rising price of fuel also added to the operating costs of train and bus companies.