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Chinese officials vowed that they will resolutely crack down on commodity hoarding, malicious speculation, and price hikes in a bid to curb rising prices.

The comments were made at a press conference of the Ministry of Industry and Information Technology on Friday.

The prices of raw materials have risen sharply since the beginning of the year, and fluctuated at high levels due to the rapid economic recovery and multiple factors.

Data from the National Bureau of Statistics showed that in the first half of the year, the industrial producer price index (PPI) rose by an average of 5.1 percent. The year-on-year increase in PPI was obviously expanding in the second quarter, which put a lot of pressure on the costs of mid- and downstream industries and related enterprises, squeezing the profit margins of enterprises. 

Among them, most small- and medium-sized enterprises are in the middle and lower reaches of the industrial chain, with weak bargaining power, impacting their production and operation, Huang Libin, an official from MIIT said. 

Unlike the two "super cycles" of commodity price increases in the 1970s and the beginning of this century, this round is more a result of the superimposition of short-term factors, Huang noted. 

The People's Bank of China, China's central bank, on July 9 announced it would cut the reserve requirement ratio (RRR) by 50 basis points for eligible financial institutions from July 15 to support the real economy.

The RRR cut, which will be imposed on all financial institutions except those who have already held the ratio at 5 percent, will likely release 1 trillion yuan in long-term funds, the PBC said.

"Such a move is hedging the impact of rising commodity prices on the production and operation of enterprises," Huang added. 

Efforts should be made to severely punish major violations of laws and regulations, such as illegal scalping of bulk commodities and tax evasion, and typical cases should be publicly exposed, according to a State Council executive meeting chaired by Premier Li Keqiang on Wednesday.

China will distribute more than 10 million tons of coal from its reserves to guarantee supply across the peak summer season, as the country has reserve facilities with a storage capacity of 100 million tons that can be arranged by the government, the Xinhua News Agency reported on Thursday.

Global Times