The China government has just instituted price controls on a group of agricultural products including, grain, edible oil, meat, milk, and eggs. Rising food cost has been one of the main contributors to inflation in China this last year.
“Major enterprises are required to submit the price-raising scheme to the government for official approval 10 working days before they intend to raise the prices” said the NDRC (National Development and Reform Commission) in a circular on interim price intervention.
The move is intended as a mechanism to fight inflation. It will be interesting to see how this plays out because in the past price controls have not been a very good mechanism for curtailing inflation.
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