2010-11-22 10:42

BEIJING - China has the capacity to keep prices basically stable, the National Development and Reform Commission said on Monday.

In a statement on its website, www.ndrc.gov.cn, the economic planning agency said China's ample grain stocks were sufficient to meet demand, while the supply of manufactured goods exceeds demand.

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If necessary, China would activate price controls and increase subsidies to low-income families to hold down inflation, which rose to a 25-month high of 4.4 percent in the year to October, the NDRC said.

The statement follows a barrage of measures by the government to keep inflation in check and anchor inflationary expectations.

The central bank also raised banks' reserve requirements on Friday for the second time in two weeks to tackle the excess liquidity that some economists say is the root cause of the mounting price pressures.