Mumbai: China, which yesterday announced a hike in cash reserve requirement for banks in a bid to quell excess liquidity in the economy, has intensified its efforts to rein in inflation with the imposition of price controls on commodities, including liquefied petroleum gas.

Consumer prices in China have steadily been growing aided by a steady inflow of export earnings and steady rise in exports. The consumer price index had hit an 11-year high of 6.9 per cent in November, adding pressure on the government to tame inflation.

The National Development and Reform Commission, the top planning body in the country, today announced price controls on grains, edible oil, meat, milk, eggs and LPG.

Producers cannot raise prices without government permission. Major enterprises are required to submit plans to the government for approval before hiking prices, NDRC said in a circular.

The agencies can direct enterprises to roll back prices or reduce the extent of price hike if they see the rise as unacceptably large, the official Xinhua news agency said.

China, meanwhile, said the newly introduced price controls will not distort the economy but analysts warned that sustained interference could result in shortages and a black market. The authorities also described the measure as temporary intervention to battle surging inflation.