Price hikes of sideline products such as garlic and mung beans will have limited direct impact on the consumer price index (CPI) because these varieties have comparatively small and more elastic demand than rice or corn does.

But the problem is that these price hikes send signals of further increases and reinforce inflation expectations, especially as some dealers continue to stockpile such products. If we fail to curb such speculative activities, it will make it even more difficult for us to manage inflation expectations, stabilize prices and ensure the people a peaceful life.

The Central Government recently reiterated the importance of a balance between maintaining stable and comparatively fast economic growth, adjusting the economic structure and managing inflation expectations. The key to effective inflation expectation management is liquidity management. We should maintain a reasonable relationship between economic growth and money supply through comprehensive monetary policies. The major task of price regulators is to ease and guide inflation expectations with concrete measures.

The State Council pledged to address price hikes of farm produce, especially to curb speculations with tough measures at a recent executive meeting. What are the guarantees of the timely implementation of such measures? Are this year's targets of price controls attainable?

At the State Council's meeting, all aspects of the recent farm produce price hikes have been analyzed and the State Council decided to address both the symptoms and the roots of the problem. The NDRC, the Ministry of Commerce, and the State Administration for Industry and Commerce are required to launch a campaign to reinforce relevant supervision efforts, curb speculative activities of farm produce, and punish dealers who ally with each other to manipulate the prices, monopolize the market and block the free circulation of these products. The NDRC has sent out more than 10 investigation teams on field-study trips nationwide. They are working on a long-term mechanism for stabilizing the production and price of farm produce including vegetables. The research will focus on the establishment of vegetable production bases, farm produce wholesale markets and a highly effective logistics system.

It was stressed at the meeting that local governments should shoulder major responsibilities in encouraging agricultural production, ensuring supply and stabilizing prices. Local government leaders should take the responsibilities in ensuring local residents an abundant supply of rice, grain and vegetables at stable prices.

Price regulators have found clues of garlic and mung beans speculation through recent market inspections and examinations, and if confirmed, these speculators will get their due punishment. They will also strengthen efforts in monitoring, analyzing, as well as predicting changes in the pricing and supply-demand of major farm produce in the domestic market.

In the long run, production and supply guarantees, and availability of a uniform, standard and reasonable farm produce market system will help solve the problem at its roots.

China's economic recovery is accelerating in the desired direction of macro-control. The generally loose supply-demand balance at the domestic market gives the government some leeway in putting the CPI growth within 3 percent this year. And we will do our best to keep the prices stable.