THE Chinese government yesterday upped the fight against inflation with the announcement of price control guidelines and a call to local authorities to offer temporary subsidies to poor families.

Efforts would be made to ensure market supplies, improve subsidy systems, make price controls more targeted and strengthen market supervision, said a statement released after a State Council, or Cabinet, executive meeting presided over by Premier Wen Jiabao.

Measures included additional support for food production, cutting delivery costs, guaranteeing fuel supplies and cracking down on hoarding.

Government departments and local governments were urged to offer temporary price subsidies for the poor, and increase allowances for needy students and student canteens. Social welfare benefits should be aligned with price levels and basic standards of social welfare should be gradually raised.

The statement said the government would further support agricultural production to maintain steady growth of output and put state reserves of grains, edible oils and sugar on the market when necessary to guarantee supplies.

Local governments are ordered to keep a close eye on vegetable production to increase supplies through the winter, take measures to cut delivery costs of agricultural products and increase cotton transportation from Xinjiang Uygur Autonomous Region.

They should also continue to reduce prices of power, gas and rail transport for chemical fertilizer producers, ensure coal supplies for power generation and increase production of oil, especially diesel oil, to guarantee a sufficient supply.

The authorities should adjust prices promptly and moderately, keep gas prices stable and impose temporary price controls on important daily necessities and production materials when necessary.

In addition, the government would strengthen market supervision and crack down on hoarding or speculation in major agricultural products, said the statement.

China's consumer price index, a main gauge of inflation, soared to a 25-month high of 4.4 percent year on year in October.

The government's top concern is to control inflation, judging from moves to raise bank reserves ratios and increase interest rates, said Yu Junwei, an analyst with Shanghai Shiji Investment Advisory Co Ltd.

(Source: Research China)