ABSTRACT

In China only prices of commodities of minor importance are determined through supply-demand relationships. Prices of the majority of commodities are fixed or approved by the state. The following are several principal categories of these prices: Ex-factory prices, Agricultural purchase prices, Wholesale prices, Retail prices. Ex-factory prices are determined by various administrative levels, depending upon the importance of the products in question. In theory, agricultural purchase prices are supposed to be based on the average cost of production of farms on an average grade of land, with average efficiency and under normal weather conditions, plus a mark-up for communal accumulation. Wholesale and retail prices charged by state and joint enterprises, as well as by supply and marketing cooperatives, are controlled by the Ministry of Commerce and its branch organizations. Chinese sources indicate that data on the current value of the total commodity turnover are frequently incomplete at the time when aggregate price indices are computed.