Peking controls food prices

PEKING has reintroduced price controls on a number of basic foodstuffs after sharp rises over the past week fuelled fears that inflation was hitting those who can least afford it.

An emergency meeting of the municipal government on Saturday ordered price limits on 27 commodities, including rice and pork, and told inspection teams to crack down on shops that raised prices above the new levels. According to the official China Daily newspaper yesterday, prices of some basic foodstuffs have jumped by up to 40 per cent in the past week.

In a separate initiative this week, the deputy prime minister, Zhu Rongji, said that the central government had made arrangements to bring the price of grain under control and to stabilise the market. State-owned shops would sell subsidised grain at lower prices to bring the price down, he said.

The reasons for the price rises are not clear. Officials have blamed farmers for not selling grain and other crops, preferring to hoard them in anticipation of price rises next year. Mr Zhu, anxious to calm consumers' possible worries, said national grain reserves were at an all-time high and the grain-price rise was 'abnormal, temporary and stirred by psychological factors'. In Peking's street markets there is no sign of any scarcity.

The new measures, if implemented, would represent a retreat on the Chinese government's commitment to remove state controls on prices and to free the trading of commodities. It was only in May this year, for instance, that Peking's government lifted price controls on grain and edible oils. At this stage, yesterday's announcements seem to be principally a warning shot against those who may be contemplating profiteering in the run-up to Chinese New Year in February. Yesterday's People's Daily blamed 'speculative profiteers' acting as middle-men between the peasants and the shops.

Food prices are one of China's most sensitive issues and the government's statements look designed to head off any panic buying. Inflation in the big cities is running at over 20 per cent, and although food remains cheap the poorest members of the public are still vulnerable.

China said yesterday that the BBC would be held responsible for showing a documentary which reported that Mao Tse-tung enjoyed having sex with large numbers of young women, Reuter reports.

The Foreign Ministry did not say what the consequences of showing the film would be. It said the BBC had 'hurt the feelings of the Chinese people' by screening the film in the face of Chinese protests. The film was shown on Monday during the run-up to the centenary of Mao's birth on 26 December.

'The BBC should be held fully responsible for all the consequences arising therefrom,' the statement said. Mao's doctor for 22 years, Li Zhisui, said in the documentary that 'women were toys for Mao'. He added that Mao preferred them young and innocent. The discussion of Mao's sexual appetite took up only a few moments of the hour-long documentary.

Mao's many happy returns, page 17