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Chinese low-income families embrace Lunar New Year with price hikes
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11:34, February 07, 2008

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Millions of Chinese low-income families are embracing the most important festival of the year, the Chinese Lunar New Year which falls on Thursday, with a frown as food prices continue to rise.

"The food price is rocketing. I spent the same amount of money as last year to prepare for the festival, but I bought fewer things." said Liu Guiying, a 43-year-old cleaner in Hohhot, capital of northern Inner Mongolia Autonomous Region.

Although the price of pork has gone up to 24 yuan per kilo, almost twice as much as last year, Liu Guiying, who relies on a monthly 230-yuan(32 U.S. dollars) subsidy from the government, added pork to her stock list.

Like Liu, China has 100 million people living on less than one U.S. dollars a day, most of whom are farmers and low-income residents in the city. They have a tight budget to make ends meet in the coming holidays.

With the pork price rising, China's inflation barometer, the Consumer Price Index (CPI) rose 4.8 percent in 2007 and hit an 11-year high of 6.9 percent in November, well above the government target of three percent.

Li Huiyong, a senior macro-economic analyst at Shenyin and Wanguo Securities, predicted the CPI would possibly set a new high in February as the traditional time for shopping sprees among Chinese, the Spring Festival comes.

To ease the negative impacts of the price rises on the low-income families, Chinese finance and civil affairs ministry has improved the subsidy to the low-income residents in the city three times in 2007, with an average increase for 30 yuan per person.

"My subsidy will increase to 260 yuan this year and my salary will also increase 120 yuan a month. Life will be better." said Liu, with a paralyzed husband and a schoolboy to feed.

To stabilize food prices, Chinese economic planner, the National Development and Reform Commission, has reassured that temporary price control measures have been implemented in all 31 provinces and municipalities on the Chinese mainland by Jan. 26. The policy limited price rises of daily food and necessities such as meat, eggs and liquefied petroleum gas.

The already tightened supply was further stretched by disrupted transportation, which was also hampered by continuous snow and sleet over much of China.

Liu Guiying has truly felt the pressure as vegetable prices escalated. She visits the market regularly and buys bargains.

The Chinese government has taken actions to cope with the price rises. A total of 18,000 tons of reserve meat is set to be put into market before Spring Festival to ensure pork supply, according to the Ministry of Commerce.

Smooth shipment of vegetables and fruits between north and south will be guaranteed to cool down price rises resulting from the destroyed crops, Deputy Minister of Commerce Yu Guangzhou has said.

The National Development and Reform Commission asked local authorities to step up price monitoring and curb arbitrary price rises of such basic necessities as instant noodles, biscuit and pure water.

In spite of all the measures, prices will continue to rise for some time before the shortage in agricultural products, the main culprit for high inflation, is greatly eased, said Cao Changqing, director of the Pricing Department of the National Development and Reform Commission.

China's CPI is estimated to hit four percent in 2008, according to a latest report by the Chinese Academy of Social Sciences.

"My best wish in the new year is that the price would stop rising and life becomes better and better." Liu's wish may speaks for many low-income residents' aspirations.

Source: Xinhua



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