THE Chinese Government is rushing food supplies to its cities and deploying riot squads in an apparent effort to forestall urban unrest sparked by hyperinflation. Central and local governments have called emergency meetings to discuss ways to suppress prices and to boost law enforcement in the run-up to the Lunar New Year, traditionally a time of tight money and big demands on consumer products. Beijing has also reimposed controls by setting ceilings on the prices of dozens of goods and services. The steps were taken even as the People's Bank of China announced yesterday that a unified floating foreign exchange rate system would be introduced on January 1. The long-awaited currency reform, which would devalue the yuan by 50 per cent, and the imminent introduction of value-added taxes and other levies is expected to spawn more panic buying. Chinese sources in Beijing said that faced with the spectre of urban unrest, the leadership will underwrite cheap supplies of food and consumer products during the festive season in a reversal of an earlier decision to cut such costs from the budget. Overturned, too, was Beijing's ban on units handing out subsidised food and New Year gifts to civil servants and urban workers. The People's Daily reported yesterday that the Beijing municipal government had purchased commodities worth five billion yuan (HK$6.7 billion) to stock the markets during the New Year and the Lunar New Year periods. The party mouthpiece quoted a local official as saying the funds were 20 per cent more than last year. The Daily added that extra consignments rushed into Beijing included ''large quantities of industrial goods for daily use and garments in complete varieties''. The city government also entrusted state-owned commercial enterprises to buy four million kilograms of vegetables, 10,000 tonnes of pork, and ''sufficient'' grain, cooking oil, beef, mutton and eggs. Similar measures were taken in cities that had logged inflation rates of more than 20 per cent in the past year. The national press yesterday also reported that major cities next year would be guaranteed ''sufficient supplies and rich varieties'' of non-staple foodstuffs including meat, eggs and vegetables. They said ''no obvious price fluctuations'' were expected for these essential items because of government interference. Both central and local-level governments have started building more ''bases'' to increase the reserves of non-staple foodstuffs. At the same time, the State Planning Commission (SPC) has issued a circular demanding that departments concerned with monitoring inflation strengthen their work on the examination and control of prices during the two festivals. ''The focus of price inspections during the New Year and Lunar New Year is consumer products and services that are closely linked to people's livelihood,'' the SPC said, adding that in large and medium-sized cities, the prices of grain, oil, meat, eggs and vegetables should be constricted. The circular said ''strict treatment'' would be accorded to units which charged prices beyond ceilings fixed by municipal governments or which realised profits in excess of approved margins. Price freezes of varying degrees have hit service sectors including transport, hotels, restaurants, hairdressers, clinics, sports and entertainment, and the repair trades. In a dispatch last night, the semi-official China News Service quoted the Vice-Governor of Guangdong, Ou Guangyuan, as proposing five emergency measures to depress grain prices, which had risen by 30 per cent in the southern province ''within a short period''. For example, the price ceiling for a popular brand of rice is being fixed at 100 yuan for 50 kilograms. Mr Ou said ''severe punishment'' would be meted out to hoarders, profiteers and speculators. Chinese sources said that after a marathon series of meetings over the past two weeks, the Politburo and the Central Committee's Political and Legal Commission had authorised cities susceptible to disorder to deploy extra police and paramilitary law-enforcement units. Xinhua (the New China News Agency) reported yesterday more than 600 patrol policemen, including 15 women, would from January 1 be watching over Beijing's Chongwen and Haidian Districts round-the-clock. Public security spokesmen said their duties would be to ''observe and maintain public security along the streets and public squares and attend to the needs of the people and to handle on the spot acts of violating the law''. Chongwen encompasses the central railway station where thousands of travellers and peasants searching for city jobs gather every day. Haidian also has a large migrant population and incorporates universities which were the epicentre of the 1989 democracy movement. Round-the-clock patrols have also been introduced in cities including Shanghai, Guangzhou, and the Shenzhen and Zhuhai special economic zones. Security sources said Beijing had also deployed crack paramilitary units including anti-riot brigades in these cities. Such elite corps staged exhibitions and other shows of force in coastal areas earlier this week. For example, on Monday, a special police task force of 80 mounted a two-hour-long ''military parade'' in Zhuhai in a bid to scare off de-stabilising elements. The semi-official Hong Kong China News Agency last night quoted the new police chief of Shenzhen, He Jinghuan, as saying that the municipality would ''concentrate its elite troops'' on fighting disorder during this sensitive time. Mr He revealed that a crack unit comprising 1,500 policemen and officers of the paramilitary People's Armed Police had been formed to deal with major incidents. Officially, municipal and police officials said the extra forces were for combatting crime. However, security sources said the police and anti-riot platoons were also targeting anti-government activities that might arise because of frustration over high prices. Xinhua yesterday quoted prominent legislators Zhang Ruiying and Zhang Guoxiang as saying ''unstable factors in society'' had increased because of hyperinflation and the recent layoffs of workers in state factories. Inflation was one of the root causes behind workers joining pro-democracy demonstrations in late 1986 and early 1989.