China announces fresh reforms, lifts price controls on commodities, services
January 5, 2015, 6:48 am

China began to liberalize the farm produce market in 1978 [Xinhua]

The National Development and Reform Commission (NDRC) on Sunday said markets will now decide the price of tobacco leaves, the last agricultural product to be freed from Chinese government price control.

A statement on the NDRC website said businesses will be allowed to decide how much they want to pay for tobacco leaves, but a minimum price will be set to protect farmers.

China began to liberalize the farm produce market in 1978, and tobacco is the last remaining controlled price.

The government has retained its regulatory role through state storage programs, by maintaining minimum prices and giving subsidies on some products.

In the latest round of reforms announced by China, prices of railway bulk cargo, parcels and privately funded cargo and passenger transport will also be allowed to freely float.

Prices of domestic air cargo will be freed, as well as prices of passenger transport of some airlines.

Limits will be removed on port service fees, including fees on container loading, ship rubbish treatment and water supply.

Limits will be removed on factory prices of explosives for civil use.

The NDRC will prevent high price volatility and keep a close eye on market order after controls are lifted, said the statement.

Meanwhile, China has published draft rules to allow foreign investors to trade in some of the country’s commodities futures.

China is the top global consumer of raw materials and has some of the most liquid commodities futures markets.

Currently, foreign companies have limited access to China’s booming commodities markets.

The move to bring in foreign players paves the way for an imminent opening of a booming market.

Source: Agencies