BBC News
watch One-Minute World News
Last Updated: Thursday, 20 December 2007, 11:17 GMT
Bank lifts China's interest rates
China meat market
Pork is a staple of the Chinese diet
China's central bank has raised interest rates for the sixth time this year, adding to its efforts to cool the country's surging inflation.

The benchmark lending rate will rise to 7.47% from 7.29% with effect from Friday, while the main deposit rate will increase to 4.14% from 3.87%.

Chinese inflation hit 6.9% in November, its highest level since 1996.

Separately, Beijing has promised to double subsidies for pig farmers to ensure pork supplies and lower prices.

Soaring food costs, and especially the price of pork which is up 56% in the past year, have been blamed for driving the main inflation rate to an 11-year high in November.

Larger farms

China's pork output fell this summer due to higher feed costs, and after disease led to a livestock cull.

The government has said it will pay farmers a subsidy of 100 yuan ($13; 6.50) for every fertile sow next year.

On Wednesday, the government vowed to spend 2.5bn yuan next year to help farmers build "standardized, large scale" pig farms, the Xinhua News Agency said.

Beijing also decided to extend sow insurance, which was launched in August to cover losses from diseases and natural disasters, to "as many sows as possible".

The government also said it would release part of its corn reserves to the market to reduce food inflation pressure, Xinhua said.

The last interest rate rise was introduced in September.

"Given the background of upward pressure in domestic prices... and in order to guide the public's expectations about inflation, we have put into play price adjustment tools," the central bank said.

SEE ALSO
China inflation up on food bills
11 Dec 07 |  Business
Consensus ahead of US-China talks
10 Dec 07 |  Business
China trade surplus at fresh high
12 Nov 07 |  Business
China moves to cool its inflation
11 Nov 07 |  Business
PetroChina is world's top company
05 Nov 07 |  Business

RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites



FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

PRODUCTS & SERVICES

Americas Africa Europe Middle East South Asia Asia Pacific