Battling rampant inflation, Beijing caps prices on food commodities

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Food coupons may be re-introduced
 
BEIJING, Jan 18 – The National Development and Reform Commission announced that from today prices on basic commodities such as grains, meat, milk, edible oil, eggs and liquefied petroleum gas would be curbed with immediate effect. This is the first occasion in 15 years Beijing has taken such a step, and follows rampant price hikes in cooking oil, which rose 58 percent over the past 12 months, and pork, beef and mutton which have risen in price more than 40 percent over the past two months.

It means that producers of daily necessities, retailers and wholesalers now require approval from central and provincial governments before raising prices, and comes just three weeks prior to Chinese New Year – a time where demand for food is particularly high and certain retailers raise prices to take advantage of this.

Proposals to reintroduce the food coupon system, abandoned 15 years ago, have been made by the Guangdong People’s Congress, that would ensure low level income families basic needs are met. The coupon system was originally introduced in 1955 and was aimed specifically at maintained national price stability and to prevent unscrupulous suppliers rising prices at key times. The buying and selling of food (and other commodities) was monopolized by the government, which then distributed food via a quota system. People could only get food from government stores with such coupons, which were determined by an individual’s needs and the size of the family.

The proposal is being studied as “part” of a package of measures designed to better control the prices of necessities while “not interfering” too much with the market economy.