China’s commodities traders in Beijing’s crosshairs after driving up prices and putting economic recovery at risk

Speculative reselling of commodities and tax evasion have dangerous economic implications for China, and now a task force aims to hold violators accountable

Crackdown comes as China has struggled in recent months to curb surging prices of raw materials amid its strong post-pandemic industrial recovery

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The surging price of raw materials in recent months, including iron ore, put many of China’s small businesses in dire straits. Photo: AFP

Published: 7:00am, 16 Jul 2021Updated: 7:00am, 16 Jul 2021

A newly formed special task force is on the hunt in China for unscrupulous traders who have been driving up the prices of commodities through speculative reselling, which hurts manufacturers and risks slowing the nation’s economic recovery.

The action was touched on in a statement released on Wednesday following a regular meeting of the State Council, China’s cabinet, chaired by Premier Li Keqiang.

“Our audits have found clues concerning violations of rules or laws, such as reselling commodities and tax evasion. Such conduct has disrupted market order and fair competition, and hurt the taxation foundation,” the statement said.

“We must turn [violators] inside out and hold them accountable, no matter what agencies or positions they are in.”

China has struggled in recent months to curb soaring commodity prices amid its strong post-pandemic industrial recovery. Demand has understandably driven up prices of raw materials such as iron ore, copper and crude oil, but speculative buying and selling between traders is said to have worsened the situation.

Details on the crackdown were limited, and the State Council did not identify which commodities were involved, but the actions are in line with vows since May to crack down on raw-material hoarding and speculation.