Supplies of coal, electricity, petroleum and transportation arestill tight and the prices of the means of production remain high,and this "will put upward pressure on the prices of downstream products and can gradually affect the prices of consumer goods," says the report.
The report on the implementation of the 2004 plan for national economic and social development and on the 2005 draft plan for national economic and social development was submitted Saturday for approval to lawmakers attending the ongoing session of the National People's Congress, the top legislature of the country.
High prices for petroleum and raw and processed materials in the international market will also cause prices to rise in the domestic market, it says.
A number of price problems have arisen in public utilities and service industries because some local authorities postponed adjusting prices on some items last year, says the report, adding that progress in the reform of factors of production such as capital and land and increases in the pay scales for labor will also drive up the consumer price index somewhat.
The government will continue to strengthen and improve macroregulation, appropriately control money and credit, and curb the excessively rapid increase in fixed asset investment, which will help check the rise in the prices of means of production, according to the report.
It also predicts the ripple effect from last year's price increases will be relatively small this year.
"This comprehensive analysis of factors affecting price levels shows that this year's projected rise in the consumer price index should be about the same as last year's actual rise," the report says.