China takes steps to combat imported inflation

15:09, April 08, 2011      

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Despite the uncertainties and uncontrollable factors in imported inflation facing China, the government has put in place multiple lines of defense to prevent imported inflation from pushing up the domestic inflation without restraint, said Peng Sen, deputy minister of the National Development and Reform Commission, on April 7.

Peng said when responding to a reporter's question that the government will prevent rising international oil prices from repeatedly pushing domestic CPI to new heights. The government has taken a series of countermeasures and is confident that it can control domestic inflation.

Under the existing domestic refined oil pricing mechanism, domestic oil refining enterprises' profit margins will gradually drop to zero when the international oil prices stand between 80 to 100 U.S. dollars per barrel, Peng said.

Currently, domestic oil refining enterprises are losing money to produce refined oil and have to use the profits from downstream businesses to offset the losses. The government has formulated plans to deal with the further rise in international oil prices and is now mulling over the establishment of a rational cost sharing system among governments, enterprises and consumers.

Peng said that China's current inflationary pressure is due to various factors, including both imported inflation and rising raw materials costs. The government has set price stability as the top priority of this year's economic work.

Related central departments are taking all-out measures to boost production, ensure supply, improve distribution networks and stabilize prices, particularly strengthen price regulations related to the public livelihood and the overall economy. Currently, the market supply is sufficient and prices are generally stable.

In terms of this year's market price trend, Peng said that as the impact of the high CPI in the second half of 2010 has gradually disappeared and a series of government regulation measures are becoming effective, China's price movements are expected to show a downward trend in 2011.

By People's Daily Online
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