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China determined to reach CPI target
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China clearly feels the pressure of inflation posed by structural price increases but is determined to keep its CPI rise at around the 4.8-percent target for this year, top planning official Ma Kai said Thursday.

China's consumer price index (CPI), which scored 4.8 percent last year and an 11-year-high of 7.1 percent in January this year, were largely attributed to structural price hikes caused by growing food and agricultural prices, Ma said at a press conference on the sidelines of the parliamentary session.

"There's a difference between China's structural price increases and apparent inflation caused by all-round, persistent and repeated price hikes," said the minister in charge of the National Development and Reform Commission.

Climbing food prices contributed to 83 percent of last year's CPI rise and 84.5 percent to that in January, Ma said in response to a journalist's question.

He said the price hikes were reasonable "price recovery", given the slight fluctuations of the past decade.

"Prices for grain and other farm produce, for example, remained low throughout the past 10 years, and the buying price for each kilogram of wheat, rice and corn rose only eight Chinese cent, or 5.3 percent, from the 1997 level," he said.

One kilogram of pork sold for 20 yuan in 1997, but the price remained as low as 12 yuan for years before it restored to the 1997 level last year.

"Given the past decade of cost increases and our own income rises, comrades, the price hikes are quite reasonable," he said.

Ma also pointed to food and cooking oil price hikes on the international market for the domestic CPI rise.

"These, however, do not mean that we can ignore the situation," he said. "On the contrary, we have to be aware of the increasing pressure."

Ma said China is "determined and ready" to keep this year's CPI rise at around 4.8 percent, citing the country's economic strength and abundant reserves and the central government's measures to maintain balance of supplies and demand.

Responding to a question from a Macao reporter, the official said the central government is taking temporary administrative measures to prevent profiteering in certain categories of consumer goods concerning the people's livelihood.

"These measures are completely different from price controls and freezes of the past," said Ma. "I think all other responsible countries will do the same under specific circumstances," he said.

Premier Wen Jiabao, in his government work report to the parliamentary session beginning Wednesday, acknowledged China is facing increasing inflationary pressure, and detailed measures for keeping prices stable.

The primary task for macroeconomic regulation this year, Wen said, is to prevent fast economic growth from becoming overheated growth and keep structural price increases from turning into significant inflation.

(Xinhua News Agency March 6, 2008)

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