Government Re-Organization Begins As Inflation Hits 12-Year High

China                                                                                            

Government Re-Organization Begins As Inflation Hits 12-Year High

China announced today (March 11) a much anticipated shuffle in the organization of government ministries as part of its cabinet reform and an overall effort to build "an efficient and service-oriented government." The changes, which will be deliberated for the remaining seven days of the annual National People's Congress meeting, will see consolidation of China's 28 ministries’ responsibilities, and include the placement of the State Food and Drug Administration (SFDA) under the auspices of the Ministry of Health (MOH). The MOH will now be empowered as the lead ministry on issues of food safety. Most observers agree that the SFDA, which was created as an independent food safety coordination administration in 2003, will lose power under the reorganization. The administration has been dogged by scandals, including the indictment and execution of its former head for corruption last year.

The MOH will be responsible for food safety legislation, while the SFDA, under the MOH, will be responsible for the monitoring of compliance with food safety regulations by restaurants, according to initial USMEF understanding. There was no mention today of other rumored changes such as those involving AQSIQ, the Ministry of Agriculture and the Ministry of Commerce.

In other news, China announced February 2008 inflation — measured as a monthly increase in prices from year-ago levels — hit 8.7 percent, the highest in 12 years. The National Bureau of Statistics (NBS) stated that 80 percent of the February rise was due to year-on-year price increases of pork and vegetables, which rose 63.4 percent and 46 percent respectively.

In a separate announcement, the Ministry of Agriculture claimed that the rise in pork prices was now under control and that evidence of increased supplies would be forthcoming later this year. A major issue of this year's Congress has been high food prices and the need to ensure agricultural policies to encourage domestic producers to keep pace with growing demand. USMEF will be providing a more in-depth look at the implications of the proceedings of the National People's Congress and China's efforts to tame price increases following the meeting's conclusion next week.

China                                                                                            

Government Re-Organization Begins As Inflation Hits 12-Year High

China announced today (March 11) a much anticipated shuffle in the organization of government ministries as part of its cabinet reform and an overall effort to build "an efficient and service-oriented government." The changes, which will be deliberated for the remaining seven days of the annual National People's Congress meeting, will see consolidation of China's 28 ministries’ responsibilities, and include the placement of the State Food and Drug Administration (SFDA) under the auspices of the Ministry of Health (MOH). The MOH will now be empowered as the lead ministry on issues of food safety. Most observers agree that the SFDA, which was created as an independent food safety coordination administration in 2003, will lose power under the reorganization. The administration has been dogged by scandals, including the indictment and execution of its former head for corruption last year.

The MOH will be responsible for food safety legislation, while the SFDA, under the MOH, will be responsible for the monitoring of compliance with food safety regulations by restaurants, according to initial USMEF understanding. There was no mention today of other rumored changes such as those involving AQSIQ, the Ministry of Agriculture and the Ministry of Commerce.

In other news, China announced February 2008 inflation — measured as a monthly increase in prices from year-ago levels — hit 8.7 percent, the highest in 12 years. The National Bureau of Statistics (NBS) stated that 80 percent of the February rise was due to year-on-year price increases of pork and vegetables, which rose 63.4 percent and 46 percent respectively.

In a separate announcement, the Ministry of Agriculture claimed that the rise in pork prices was now under control and that evidence of increased supplies would be forthcoming later this year. A major issue of this year's Congress has been high food prices and the need to ensure agricultural policies to encourage domestic producers to keep pace with growing demand. USMEF will be providing a more in-depth look at the implications of the proceedings of the National People's Congress and China's efforts to tame price increases following the meeting's conclusion next week.