China to fight price manipulation with heavy fines

China will fine companies up to 2 million yuan ($295,400) for sending misleading or fake information about price increases, according to a new draft regulation by China's economic planning agency.

The announcement by the National Development and Reform Commission appeared to represent an intensification of its efforts to crack down on profiteering that the government fears could unleash more serious inflation.

Hoarding of goods will also be subject to fines of 2 million yuan, the NDRC said on its website.

Last month, the NDRC levied a 1 million yuan fine on firms which had colluded to force up mung bean prices.

The Chinese government has set a target of 3 percent for average consumer prices inflation this year. Prices rose 3.1 percent from a year earlier in May.

June figures are due on Thursday. Economists polled by Reuters forecast a 3.3 percent increase in the consumer price index.

($1=6.770 Yuan)

[Source: By Zhou Xin and Simon Rabinovitch, Reuters, Beijing, 13Jul10]

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