Anchor: The price rises have got everyone hot under the collar since mid-2007. The challenge it poses for the country has been a focus for China's legislators and political advisors at the current annual sessions in Beijing. Concrete measures to bring the surging prices under control are expected later this year. Our reporter Shuangfeng takes a closer look.

Reporter:
"Anyway, the price of meat, like pork, has been rising quickly, but vegetables are ok."
"We have to eat, don't we? I will go to more places and buy where it is cheaper."
"Prices are growing much faster than our income. Honestly, we have pressures, but basically it's bearable. I think something must be done with it."

The latest statistics from the National Bureau of Statistics show that the CPI, the main gauge of inflation, reached an alarming 11-year monthly high in January 2008 with a 7.1-percent rise.

Food prices have increased 12.3%, which pushed the CPI up by 4.8 percent in 2007, again the highest annual level since 1997.

Professor Ma Longlong, from the business school of the Beijing-basd Renmin University, talks about the reasons behind the price hike.

"High-speed economic growth will certainly bring inflation to some degree. I think it's reasonable. Actually it's determined by supply and demand. Currently there is a gap between these two. For example, the supply of oil, steel and some grains falls short of demand. So the rise of CPI is inevitable."

His thoughts are echoed by Chang Zhenyong from east China's Shandong Province, who is attending the National People's Congress.

"If the demand decreases, or influenced by the cost of raw materials, sometimes prices may rise inevitably. Surging price of agricultural products, like vegetables, meat, eggs and so on have made a great impact on local people. Now they need to spend more on their daily necessities."

In his opening address to the national legislative session on Wednesday, Premier Wen Jiabao pledged to set China's CPI growth rate within 4.8 percent in 2008.

"One major task for macroeconomic regulation this year is to prevent the overall price level from rising rapidly. To fulfill this task, we must take powerful measures to increase effective supply while curbing excessive demand."

Measures may include expanding production, improving the reserve system, monitoring changes in supply and demand and strengthening market and price oversight.

Premier Wen Jiabao also stated that this year China will follow a tight fiscal policy. This will sustain a steady and fast economic development and avoid drastic fluctuations in the economy.

Professor Ma Longlong from Renmin University is optimistic about this.

"It's reasonable that the growth rate of CPI remains around 5% on average this year. And it may fall slightly in the fourth quarter with the government's countermeasures gradually taking effect."

Shuangfeng, CRI News.