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China steps in to curb inflation | China steps in to curb inflation |
(about 4 hours later) | |
China's cabinet says it will temporarily intervene in the market to curb rampant food and fuel price rises. | China's cabinet says it will temporarily intervene in the market to curb rampant food and fuel price rises. |
Retailers and producers will face heavy fines if they increase the price of basic necessities, the government says. | Retailers and producers will face heavy fines if they increase the price of basic necessities, the government says. |
Food prices climbed more than 18% in November, while the price of pork jumped by more than 50%. | Food prices climbed more than 18% in November, while the price of pork jumped by more than 50%. |
Inflation has traditionally been associated with civil unrest in China, and correspondents say the intervention shows the government is very concerned. | Inflation has traditionally been associated with civil unrest in China, and correspondents say the intervention shows the government is very concerned. |
During the past 20 years, the Chinese administration has largely abandoned price controls, as the free market took hold across the country. | During the past 20 years, the Chinese administration has largely abandoned price controls, as the free market took hold across the country. |
The price of basic essentials has increased hugely during this time, and families on low incomes - numbered in their hundreds of millions in China - currently spend between 30% and 50% of their income on food for the table. | The price of basic essentials has increased hugely during this time, and families on low incomes - numbered in their hundreds of millions in China - currently spend between 30% and 50% of their income on food for the table. |
According to the BBC correspondent in Shanghai, Quentin Sommerville, rising prices were the main concern among Chinese households last year, outranking worries over corruption and the growing wealth gap. | According to the BBC correspondent in Shanghai, Quentin Sommerville, rising prices were the main concern among Chinese households last year, outranking worries over corruption and the growing wealth gap. |
But economists are sceptical that the new rules will work, as price controls often lead to empty shelves. | But economists are sceptical that the new rules will work, as price controls often lead to empty shelves. |
And the UN's food aid agency is warning that another measure taken by China - restricting the exports of rice and other staples - could have serious effects in the region. | |
The World Food Programme says China's move, which followed similar restrictions imposed by India and Vietnam, could help to cause acute food shortages. | |
The WFP says North Korea, East Timor, Afghanistan, Bangladesh and Cambodia are particularly at risk. |
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