Photo: flickr: <3 erin
The Chinese government asked the country’s major liquor manufacturers to stop raising prices as they battle continued inflation. As a result, their share prices fell across the board.Via Shanghai Daily:
“Liquor products are not staple consumer goods but they play a special role in stabilizing market prices,” said a statement on the China Alcoholic Drinks Industry Association’s website. “There should not be any price hikes.”
Representatives from Kweichow Moutai Co, Wuliangye, Luzhou Laojiao Co, Anhui Gujing Distillery Co and other distillers attended a September 16 meeting where the National Development and Reform Commission, China’s top price authority, required liquor makers to “keep prices stable,” the statement said.
The companies had intended to raise prices by 20% to 30% this month– totally unacceptable to the government as they worry about hot money flowing into the country and rising prices in other sectors.
In a meeting with IMF leaders this Saturday, China’s central bank governor Zhou Xiaochuan, said outlook was still positive overall, but that things were going to be rocky in the short term.
“At present and in the following period, China’s economic growth momentum remains relatively strong,” said Zhou, “but in the short term, China faces challenges of rapid price increases and more capital inflows.”
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