Beijing to buy vegetable markets in an attempt to stabilise food prices

Beijing's municipal government plans to invest in retail vegetable markets to strengthen its ability to stabilise prices.

The government will buy 10 vegetable markets and invest in another five in each of the city's 16 districts in an effort to 'fundamentally solve the problem of government control over vegetable retailing', the city's commerce commission said.

Farmers on the city's outskirts and elsewhere will be able to sell their vegetables directly to designated community markets in inner-city areas so that a simplified supply chain can keep prices low and guarantee farmers' interests, it said.

The commission did not detail the size of the stake the city intends to hold in each of the new markets, who the other investors might be or the estimated cost of the scheme.

The Chinese Academy of Social Sciences' Professor Weng Ming, who has studied farm-produce trading, said: 'Experience has proved that the market economy cannot solve all problems. For instance, we have seen rampant food safety problems and speculation in the food market. The government can have a bigger say in pricing if they invest in markets.'

State-owned vegetable markets could probably contain high prices in the short term, he said, but that did not mean they would be able to provide good service in the long term.

'I don't think things can improve if there are more Jingkelong stores, which, like many others, soak apples in water to make them heavier,' he said, referring to a leading state-owned supermarket chain in Beijing.