China´s top economic planner has announced price controls on a package of products, including grain, edible oil, meat, milk, eggs and liquefied petroleum gas, Xinhua learned Wednesday from a work conference of the National Development and Reform Commission (NDRC).

"Major enterprises are required to submit the price-raising scheme to the government for official approval 10 working days before they intend to raise the prices," said the NDRC in a circular on interim price intervention. The move is believed to be a bid to tackle inflation.

Surges in prices of staples such as grain, pork and cooking oil since May 2007 lifted the consumer price index (CPI) to 4.6 percent in the first 11 months of 2007, and an 11-year high of 6.9percent in November, well above the government´s three-percent target.

Official statistics revealed that edible oil, pork and beef prices in early January in 36 large and medium-sized cities nationwide surged 58 percent, 43 percent and 46 percent respectively year on year.

The government should notify the enterprises within seven work days after it gets the applications from the enterprises whether to approve or reject the schemes on the basis of whether the pricerise range is reasonable, noted the circular.

The NDRC said big wholesalers and retailers were required to report to the government about the sales conditions within 24 hours when prices were raised by more than 4 percent in one price rise, or raised several times by more than 6 percent within 10 days, or incrementally by more than 10 percent in 30 days.

The price and market regulation agencies have the right to ask the enterprises to return the prices to normal or reduce the pricerise range if they regard the rise as unacceptably large.

In the interim price intervention period, enterprises should report to the government if they intend to raise prices. Those enterprises that do not file reports to the government when raising the price or raising the price ahead of the approved schedule would be punished by the government, said the circular.

The NDRC was keen to point out that price intervention measures were not equal to a price freeze or interfering with the enterprises´ autonomy in setting the price. This move was targeted at those commodities that were closely related to people´s daily life and which have experienced galloping price rises recently.

"When the surging prices of some commodities becomes stable, the government will lift interventions in a timely manner," added the circular.

The NDRC also released the first batch of 12 big enterprises and wholesalers required to apply for official approval for price rises. They include China´s leading instant noodle manufacturers such as Ting Hsin International Group, Uni-President and Baixiang Food, and the dairy giants such as Yili, Mengniu, Bright Dairy and Food and Sanlu.

The country´s leading edible oil producers such as the China Oil and Food Corporation and Luhua Group are required to submit their price-raising scheme when they intend to raise the small-packaged edible oil prices, according to the NDRC.

The NDRC said more enterprises would be added to the list.

The recent clampdown on illegal pricing has helped to bring down liquefied gas retail prices by 19 percent in major Chinese cities, said the NDRC on Tuesday.

The price control measures are temporary, reasonable and in compliance with the country´s price law, said Cao Changqing, director of the pricing department under the NDRC.

"Unreasonable price hikes have had a negative impact on the society," said the NDRC, adding that illegal pricing activities, including colluding to raise prices, hoarding goods and jacking up prices and spreading rumors on price rises, had harmed the interests of consumers and disturbed market order.

"When essential commodities and services see or are expected to see substantial hikes, the State Council and local governments could take intervention measures, including restrictions on enterprise profit rates, setting price ceilings and price rise reporting practice," Cao said, citing Article 30 of the country´s Price Law.

"The interim interventions are helpful to keep market order, curb the unreasonable price hikes and stabilize the market."

Rising prices of crude oil, grain and other primary products on the international market also exerted huge pressure on domestic prices, said macroeconomic analyst Lin Songli of the Guangzhou-based Guosen Securities.

"The culprit of rocketing inflation is overheating and excess liquidity," he said.

China´s leaders made it clear at the annual central economic conference in December that curbing economic overheating and inflation was their highest economic priority in 2008.

The move of the NDRC was another effort taken by the government after the latest price freezes on gasoline, natural gas, electricity, water, heating and urban public transport fees in the near future.

China´s central bank announced on Wednesday it would raise the required reserve ratio for commercial banks by half a percentage point on Jan. 25.

The ratio would be raised to 15 percent, the highest since 1984,part of the stringent monetary policy. This was to siphon excess liquidity at banks and curb the overly-fast growth of credit against the backdrop of the country´s foreign exchange reserve that had reached 1.53 trillion U.S. dollars by the end of 2007, up43.32 percent from a year earlier.

"The interim administrative interference and monetary policy are both targeted at the inflation and excess liquidity and give aclear signal that the government will do its best to tackle these problems," Ou Minggang, deputy editor-in-chief of "Chinese Banker" magazine, told Xinhua on Wednesday.

He added the government should also take into consideration the international economic background in formulating macro-economic policies to achieve better results.

Chinese shares saw their sharpest decline in nearly eight weeks on Wednesday, losing about three percent in reaction to heavy losses on Wall Street and deepening concern over a U.S. recession.

Ou added the influence of a U.S. recession on the Chinese economy was difficult to say now. It would definitely make it more difficult for the Chinese government to implement it