China takes multi-pronged measures to ensure commodity supply and stable price
Updated: May 19, 2021 20:55

China will work to ensure the supply of commodities and keep their prices stable, to maintain steady economic performance, the State Council executive meeting chaired by Premier Li Keqiang decided on May 19.

Since the beginning of this year, due to multiple factors, especially the transmission of global price rise, some commodities have seen extended price rally, with the prices of some varieties hitting new records.

The government must take very seriously the adverse impact caused by the price hike, and take both holistic and focused measures in light of market dynamics to exercise precision regulation, so as to ensure the supply of commodities and curb unreasonable price increases and prevent transmission to consumer prices.

“We must carefully analyze the reasons behind this round of rapid increase in commodity prices and focus on the crux of the issue, to adopt measures in a targeted and holistic approach,” Premier Li said.

A host of steps were decided upon to strengthen two-way adjustment of supply and demand, including raising export tariffs on certain iron and steel products, temporarily exempting tariffs on pig iron and scrap steel, and canceling export tax rebates for some steel products, to increase supply in the domestic market. Dedicated efforts will be made to advance structural adjustments and discourage projects with high energy consumption.

The country’s rich coal resources will be further tapped. Key coal companies will be encouraged to raise production and supply while ensuring safety, and the capacity of wind, solar, hydro and nuclear power will be increased to ensure energy supply during summer peak time.

Opening-up will be pushed forward, to recalibrate the import, export and buffer reserves of commodities, facilitate customs clearance, and better leverage international and domestic markets and resources, to more effectively ensure supply and keep prices stable.

Market regulation will be strengthened. Industry associations should play their due role in enhancing industry self-discipline. The regulation on futures and spot markets will be better coordinated, and targeted measures will be taken as appropriate to screen abnormal transactions and malicious speculations.

Irregularities such as making and executing monopoly deals, spreading false information, price gouging and hoarding will be dealt with to the full extent of the law and brought to light.

“While the market continues to play a decisive role in resources allocation to ensure the supply of commodities and keep their prices stable, the government must better fulfill its responsibility. Any monopoly and hoarding will be cracked down upon under the law to step up market regulation,” Premier Li said.

Efforts will be made to maintain the stability of monetary policy and keep the RMB exchange rate broadly stable at an adaptive, balanced level, to guide market expectations as appropriate.

Assistance will be provided to help market entities, especially micro and small businesses and self-employed individuals, cope with rising costs and other difficulties in their production and operation.

Policies to provide tax relief for micro and small enterprises and self-employed individuals, and refund all due VAT credits to advanced manufacturing enterprises on a monthly basis will be effectively implemented, and procedures for such concessional tax policies streamlined.

Direct-benefit monetary policy tools will be well executed. Re-lending and rediscounting will be scaled up to underpin inclusive finance. Policies to incentivize reductions in the guarantee fees of financing for micro and small enterprises will be exercised, to encourage banks to issue more credit-based loans.

“Policies for tax and fee cuts and inclusive finance will be refined, and assistance to market entities in difficulty scaled up. All the temporary support policies must be fully delivered, to safeguard the lawful rights and interests of micro and small firms and self-employed individuals,” the Premier said.

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