INFLATION will be high on the agenda of the upcoming National Work Meeting on the Economy to be held later this month in Beijing. Sources have indicated that ways to depress inflation, based on a 10-point anti-inflation package put forward by premier Li Peng in September, will be discussed at the conclave. In a telephone conference in early September, Mr Li called for imposing a cap on investment in infrastructure projects, an increase in market supply, strengthening the price-monitor mechanism and restraining public consumption. The premier also called for new legislation on price regulation and encouraged the media to play a role in monitoring market changes. The authorities have since admitted these measures have not been effective, saying some local governments have not fully implemented Mr Li's policies. The Government's adjustment of grain procurement prices is also behind the soaring prices. The rapid growth of the economy in the past decade and economic imbalances between regions are other factors that have led to high inflation. Prices have continued to soar since the introduction of the measures suggested by the premier, and this has led to new problems. In Beijing, some retailers refused to carry unprofitable merchandise after price ceilings were re-imposed on certain products. Many Beijing residents have been inconvenienced by the shopkeepers' boycotts. In some northern provinces, individual local governments have issued grain coupons to residents. The move comes despite the fact that coupons were abolished when the Government lifted price controls a few years ago. Officials in these regions have admitted in private they are reluctant to adopt such measures. Economists believe the Government is considering both administrative and economic measures in the hope they will soon end the country's inflation problems. The national work meeting is likely to endorse the 10-point measures suggested by Mr Li and suggest special emphasis is placed on controlling capital spending and the growth of public consumption. The senior echelons of the Communist Party are alarmed by runaway prices. Some top leaders have privately visited the markets to collect first-hand information on market changes. According to official figures, China's retail price index jumped 24 per cent in September over last year's and still showed no sign of levelling out. Based on the September figures, experts believe the average price index for the year will reach 20.7 per cent - making 1994 the year with the highest inflation since 1978. Beijing had set the 1994 inflation target at below 10 per cent.
