BEIJING is confident the price of consumer goods will remain stable for the rest of the year, an official of the Ministry of Internal Trade said yesterday. Jiang Zengwei, head of the ministry's Consumer Goods Circulation Department, was quoted by the official Xinhua (New China News Agency) as saying that the tension between market supply and demand would be alleviated in the next few months. Mr Jiang also revealed that Beijing would impose stronger measures in regulating the consumer markets to stabilise prices. These measures would include keeping 70 to 80 per cent of the supply of daily consumer goods in the hands of the state and ensuring that state-owned poultry shops continue to supply at least 40 per cent of national supplies. He ruled out large-scale liberalisation in the marketplace, prohibiting state-owned vegetable stores from giving up their vegetable business and branching out into other, more lucrative, lines of trade. Mr Jiang said that while the Government supported state-owned stores paying more attention to market changes and profits and losses, it must give state and public interests top priority. The confidence call made by Mr Jiang came at a time when economists were debating how to control runaway prices. Liberal economist Liu Guoguang wrote in his column in the China Information Newspaper that the Government should show some courage in fighting inflation by relaxing control over interest rates. These were the only measures to solve China's inflation problem, a dispatch by the semi-official Hong Kong China News Agency reported Mr Liu as saying. The economist warned that the Government could no longer keep prices down by relying on traditional methods such as imposing quotas, controlling investment and credit expansion. He said that although Beijing had raised interest rates twice last year, the adjustment was only modest and inadequate relative to soaring prices. The artificially low or negative interest rates meant the cost of borrowing was too low which would lead to a further shortage of funds. Mr Liu also said a credit crunch imposed by official banks inevitably led to the appearance of black market lending where companies obtained loans by paying their lenders interest at levels much higher than the official rate. The black market not only did nothing to cool inflation, but bred corruption, he warned. Mr Liu's views were apparently not shared by two economists - Xiao Zhuoji and Dong Fureng - who argued it was unrealistic for Beijing to adjust interest rates. The two economists were yesterday reported as saying that since most enterprises relied on cheap funds borrowed from banks to survive, any upward adjustment of interest rates could make many of these enterprises bankrupt.