MercoPress. South Atlantic News Agency

China to freeze basics and energy ahead of Lunar New Year

China will introduce partial price freezes on basic commodities such as gas and oil and crack down on profiteering, hoarding and other activities fuelling inflation, the government announced on Wednesday. Government officials are concerned about prices next month when the Lunar New Year celebrations.

In a cabinet meeting chaired by Prime Minister Wen Jiabao, the government also threatened market intervention and an expansion of punishments for those who violate the nation's price law, a circular said. "Present prices for crude oil, grains and other primary products are rising on the international market and bringing rather large pressures on to domestic prices," the circular posted on the government website said. "Every region and every department must support the policy of 'preventing the fast-paced economy from becoming overheated and stopping structural price rises from turning into clear inflation.'" In the coming months, adjustments on prices for oil products, natural gas, and electricity will not be permitted, the circular said. Price rises for gas, water, heating and public transport and other public services, including school fees will not be allowed, while prices for medical services and agricultural products, such as fertilizer will be stabilized, added the communiqué. Inflation in China hit an eleven year high 6.9% in November, according to official statistics. The hike was propelled by 18.2% rise in food prices and the price of pork, which forms the core of most Chinese diets, was up by 56%. Inflation has traditionally been a cause of concern for China's government, as rising prices have historically fuelled social unrest and anti-government protests. "We must be on the look-out for a small number of enterprises in some areas that are increasing prices across the board, hoarding and profiteering and driving up prices" insisted the announcement adding that government inspection teams would be beefed up to check markets ahead of the coming Chinese Lunar New Year, the nation's most important holiday, next month.