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BEIJING - Chinese Premier Wen Jiabao said yesterday that the world's fastest-growing economy would be able to stabilise food prices after years of rapid industrial growth.
Wen, speaking at the largest farm wholesale market in Beijing, was addressing public concerns over price rises after the consumer price index hit a 33-month-high of 4.4 per cent in June.
China's economic planning agency last week ordered local governments to check companies' pricing practices and punish price manipulators in a fresh move to curb rising inflation.
Surging food prices boosted the growth in inflation in June, prompting the central bank to again lift interest rates last month. Several industries have started to raise prices and the price of the staple pork has risen due to an outbreak of pig disease.
"Wen assured the public that the government would surely be able to ensure supply and stabilise prices as the nation has achieved steady and fast economic growth for several years with good harvests of grain crops," Xinhua news agency said.
Pork vendor Qian Guangping was quoted as saying that rising pork prices had dented demand and cut sales.
"As pig breeding has a production cycle, it will take some time," Wen said. "The key is to stimulate the enthusiasm of the farmers. As long as the policies are right, pork supply will rally and the price will fall."
Wen said agricultural subsidies on seeds, farming machinery and other supplies must be handed directly to farmers.
He encouraged flood-stricken areas to restore farming as early as possible to secure autumn grain crop production, which normally accounts for three-quarters of the country's annual grain output.
China has been hit by widespread flooding this summer, killing 700 people and destroying crops.
- Reuters
