The State Council will attempt to rein in inflation from its
highest level in more than a decade by curbing illegal price-fixing
activities that have partly driven up prices on basic goods such as
cooking oil, eggs and flour.
The revised rules not only sharply increase penalties for
price-fixing, but are also designed to closely monitor industry
associations to keep prices in check.
Those who manipulate market prices and ignore the prices set by
the government in emergencies face a maximum fine of 1 million yuan
($138,000), up from 400,000 yuan.
Anyone involved in price manipulation will be fined, even if
they do not profit, the rule state.
Previously, those who did not earn a profit were exempted from
fines, but could have been stripped of their business licenses.
Profiteering industry associations be can fined up to 500,000
yuan if they are found to have manipulated market prices and
deliberately spread "rumors on price information".
Those found guilty of "serious cases" of market manipulation can
be banned permanently, the rules state.
Insiders said the central government is taking a harder line on
suspected industry associations, which have been suspected of
playing key roles in previous cases of price-fixing, such as the
instant noodle industry.
In addition to the major changes, the new regulation specifies
that deliberate hoarding as a means of driving up prices must be
punished.
The new rules, passed by the State Council on Wednesday and
published on its website on Sunday, were made on the basis of
regulations passed in 1999 and amended in 2006.
An unnamed official with the State Council's Legislative Affairs
Office and the National Development and Reform Commission said:
"The revision is because illegal price-fixing activities have
pushed up prices in some industries and regions, which has
disturbed the market economy order."
The prices of staples such as grain and pork surged last year,
lifting the consumer price index to 6.9 percent in November, well
above the government's target of 3 percent.
(China Daily January 15, 2008)