Despite concerns, the nations top policy-making body, the National Development and Reform Commission, has vowed to push ahead with its liberalization campaign.

We will allow the scarcity of resources to determine their price, said Bi Jingquan, the commissions vice-minister in charge of price reform, at a national forum last week. Thats the basic principle of the price reforms.

His words were echoed by a think-tank report released over the weekend, which called for price reforms to encourage more efficient economic growth.

Bi said liberalizing the pricing of raw materials and energy will definitely increase costs in the long run, but the government is determined to make prices more dependent on market forces.

Industry insiders said his speech was the first time the government has formally expressed its determination for pricing reform.

The major concern over the liberalization was possible consumer price hikes, which may cause financial difficulty for farmers and other disadvantaged people.

Bi said the government is considering further measures to liberalize the price of coal, electricity, oil, natural gas and water. And related social policies, such as offering subsidies, are being considered to lessen the impact on disadvantaged groups.

Over the weekend, the governments top think-tank, the Development Research Centre (DRC) under the State Council, also called for reforms on resource prices to promote more efficient economic growth.

The price reforms should increase the costs of resource products for businesses with low efficiency, said the DRC report, cited by Xinhua News Agency yesterday.

The DRC attributed Chinas current high energy-consuming growth mode to a price system that fails to reflect the scarcity of resources.

Statistics from the centre show that water is Chinas most precious resource, yet the water price is only one third the international average.