CHINA'S bold price reform scheme suffered a setback yesterday when Beijing authorities adopted emergency measures to slap price controls back on 27 major commodities following a week of explosive rises. According to official reports yesterday, the municipal government decided to reimpose price controls at an emergency meeting at the weekend, just seven months after the Government lifted a 40-year-old grain rationing and price control system as part of efforts to build a market economy. The controls will cover daily necessities such as rice, pork, grain and cooking oil, the prices of which have soared by up to 40 per cent in the past week, the English-language China Daily said yesterday. The announcement came shortly after China's economic czar, Zhu Rongji, had declared that ''stabilising the grain price and inflation . . . are key to a smooth implementation of next year's reforms''. A mainland economist said unregulated price hikes would deepen public discontent and undermine bold economic reforms next year. However, he maintained that the latest price fluctuations should not be equated with the panic-buying in 1988, which led to the downfall of Zhao Ziyang, the former party chief. He indicated that people had had more money in their pockets in recent years and that there had been no large-scale panic-buying in the cities. Speaking during an inspection tour in the central province of Anhui, Mr Zhu warned that the latest ''fluctuations'' of grain prices were a signal that must not be ignored. Pro-China newspapers had reported rises in grain prices of between 30 and 50 per cent in cities such as Fuzhou and Guangzhou. Panic-buying had been reported in Fuzhou. The China News Service (CNS) said Mr Zhu had specifically addressed the problem of rising food prices and panic-buying for household appliances in some regions during the Anhui trip. Insisting that the state recorded a bumper harvest this year with total grain reserves at an all-time high, the Executive Vice-Premier dismissed the surge as ''abnormal, temporary and driven by psychological factors''. One reason for this, he said, was that peasants had hoarded their stock to wait for higher prices expected after a national agriculture work conference this month decided to increase state grain purchase prices from next year. Mr Zhu also blamed some leading cadres for their failure to take contingency measures and make psychological preparations for the production and distribution of grain after prices were deregulated. A small portion of the masses mistakenly believed that the bold reforms to take place next year would increase the tax burden on enterprises and push up prices further, the economic supremo said. Mr Zhu said the ruling party and the central Government had worked out a comprehensive plan to take effective measures to stabilise grain prices immediately. These included selling state reserves of grain and reducing the prices in state-owned shops in order to lower grain prices to a reasonable level, he said. He rejected as ''erroneous'' any thought that the Government would no longer intervene after price controls were lifted, hinting that state orders to stabilise grain prices were in line with the principles of a market economy. Pointing to the sweeping economic reforms next year, Mr Zhu said they were bound to affect some vested interests. ''[We] must fully estimate the degree of difficulty and complexity of these reforms,'' he said. Mr Zhu maintained that some outstanding contradictions and problems in the national economy had yet to be fundamentally solved, in spite of the austerity measures introduced since July. He singled out problems such as overheated capital investments, excessive money supply and high-level inflation. ''Some comrades are over-enthusiastic about launching new projects. They are neither concerned about reform nor the livelihood of the masses. This trend must be corrected,'' Mr Zhu said. In another CNS despatch last night, economists also rang the alarm bells against rising grain prices. Putting the annual economic growth rate at 15 per cent or even higher, the economists said inflation would probably stay above 10 per cent, which they described as a line of warning. The China Daily report said dried noodles, for example, went up from two yuan (HK$2.68) per kilogram to 2.6 yuan. Cooking oil rose from 5.8 yuan per kilogram to eight yuan. It quoted the Beijing Price Bureau as saying many farmers this year had not handed in their grain in anticipation of higher prices next year. Another reason was that many grocery stores increased prices when consumers, thinking that prices would rise next year, started buying more. Beijing Vice-Mayor Wang Baosen assured residents there was no shortage of grain, meat or vegetables, and he said shops that raised prices beyond state limits would be punished. The municipal city's party chief, Chen Xitong, said: ''Through stabilising the market prices, we can ease the pain on residents who go shopping during the New Year and the Spring Festival.'' The report said prices of grain, cooking oil and vegetables in state-owned shops had returned to normal, adding that the Government planned to offer subsidies to those shops. Special teams had been sent to inspect the prices and quality of goods in both free market and state-owned shops, it said.