Prime Minister: anti-inflation remains a priority for China

Premier Wen Jiabao has called for strengthening the fight against inflation, which touched food and housing, thus threatening social stability.

The consumer prices rose 6.1% in September year on year, marking a slight slowdown compared to August (6.2%) and July (6.5%, the highest rate in three years) .

According to the Chinese leader, providing livelihoods for the people are crucial for social stability. “The price control measures must be taken at the most basic level,” said the Prime Minister during a visit in Guangxi province.

The government will control food prices by ensuring an adequate supply, increasing the reserves of commodities and decreasing prices of transportation from production sites to markets, Wen said.

Food products represent on average one third of monthly household expenditure in China.

In September, the only food component in the inflation index posted a 13.4% increase over one year. However, analysts expect a slowdown, due to increased supply of pork and a good harvest of grain.

Beijing authorities have already undertaken several measures to curb price increases: reduction of cash that banks can lend and raising interest rates for five times last year.

The leader also said that measures to control house prices would remain in place. Since the beginning of the year, the government banned the purchase of a second housing in some cities, set up a tax on land in Shanghai and Chongqing and increased the minimum amount to be paid on the purchase of an apartment.

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