Full Text: Report on China's economic, social development plan(2)

2. Initial results were achieved in curbing price increases.

Market supply remained stable. We worked hard to develop agriculture and grain production in particular, supported the construction of vegetable production bases, and implemented a policy to support hog production. We began temporarily purchasing and stockpiling cotton, canola seeds, soybeans and corn, and established a reserve system for winter and spring vegetables in major northern cities. We organized as needed the import and release of corn, soybeans, edible oils, cotton, sugar, pork and other commodities in short supply, and released a total of 39.86 million tons of grain and 1.27 million tons of sugar from national reserves.

Monetary conditions improved significantly. We used a combination of various monetary policy tools, raising required reserve ratios six times and the benchmark interest rates on savings and loans three times. We granted 7.47 trillion yuan of RMB loans for the year, 390.1 billion less than the previous year. The balance of year-end broad money supply (M2) rose 13.6% year on year, down 2.4 percentage points from the target figure.

Distribution costs were brought under control. We eliminated, reduced or exempted a number of fees and charges relating to farmers and enterprises. We adopted a preferential price policy on the water and electricity used for producing agricultural and sideline products, and exempted value-added tax (VAT) on vegetable wholesaling and retailing. Work on reviewing toll roads and phasing out tolls on government-financed Grade II highways moved forward in an orderly manner. Collection of stall rental fees at farm produce markets and slotting allowances demanded by supermarkets was further standardized.

Oversight of the market continued to be tightened. We severely punished a small number of commercial enterprises for illegal pricing practices, carried out intensive campaigns to crack down on price fraud, the malicious hoarding of goods, and rumors of impending price increases, and aggressively pushed forward law enforcement efforts to counter price fixing. Last year, we dealt with all manner of pricing irregularities totaling 45,100 cases, and imposed economic penalties worth 2.091 billion yuan.

Price increases declined gradually. The rise in the consumer price index (CPI) fell each month from 6.5% in July to 4.1% in December, and it increased 5.4% year on year, failing to meet the target. Rises in housing prices dropped in major cities, and in December, nine out of the 70 large and medium-sized cities witnessed a year-on-year decrease in the prices of newly built commodity housing, and 52 of them saw prices fall over the last month.

The effects of rising prices were cushioned. A comprehensive mechanism was set up to coordinate social assistance and social security benefits with price increases, a system of price adjustment funds was established in accordance with the law and was constantly improved, and throughout the year, temporary price subsidies totaling nearly 10 billion yuan were granted across the country.