On August 9, 2011, the National Bureau of Statistics of China released data showing that the CPI rose 6.5 percent in July, the biggest increase in 37 months. On August 16, 2011, Xinhua News Agency’s Outlook Weekly published an article pointing out that when state-owned enterprises raise prices, the government has difficulty regulating inflation. The article referenced several interviews that emphasized the responsibility of state-owned enterprises to stabilize prices.
One interviewee said, “Many commodities have higher prices because of higher labor and raw material costs. It is the monopolies in the electric, oil, and petrochemical industries that charge more for raw materials. These industries earn high profits, but still raise prices several times a year. It is clearly neither reasonable nor fair to request private enterprises and consumers to bear the consequences of higher prices.” Another interviewee said, “Since state-owned enterprises use China’s national resources and enjoy state subsidies, they should assume the important task of stabilizing prices. They cannot stress their state-owned background when they want subsidies, but emphasize the market mechanism when they want to increase prices.”
The article concluded, “Many experts believe that it is the people who own state-owned enterprises. In the more and more severe circumstance of managing inflation, state-owned enterprises should take more social responsibility.”
Source: Xinhua News Agency’s Outlook Weekly, August 16, 2011,