By Dong Zhixin (chinadaily.com.cn)
Updated: 2007-08-13 10:18

NDRC, the country's top price regulator, has ordered a crackdown on the manipulation of food prices, after several industry associations and firms announced plans to raise prices, including instant noodles and Chinese fast-food chains.

Meanwhile, the Ministry of Civil Affairs raised the urban minimum living allowance for low-income families by 15 yuan a month.

The State Information Center (SIC), a think-tank under the National Development and Reform Commission (NDRC), agreed on the mounting price hike pressure, but sought to play down concerns over full-scale, significant inflation in a report on Friday, citing stable prices of manufactured products.

Related readings:  Time to restructure the CPI  Economists: 4% CPI rise still healthy  Central bank warns of inflation risks  China to crack down on price-hiking producers, sellers

Lu Zhongyuan of Development Research Center of the State Council echoed SIC's point. In the first six months, the core CPI, excluding food and energy, rose a mere 0.9 percent, indicating the inflation is running at a low level, Lu said.

The rationale behind using core CPI instead of CPI is that food and energy prices are vulnerable to changes in weather and international political situations and is not a good reflection of substantial change in demand and supply.

However, the central bank suggests close attention be paid to food prices as, unlike in developed countries, food accounts for 34 percent of China's CPI.

The State Information Center put the CPI growth in the third quarter at 4.3 percent, up from 3.2 percent for the first half of this year, while anticipating the growth slow down in the fourth quarter as food prices will gradually fall due to greater supplies.

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