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China plans to tax grain and other basic food exports in effort to curb inflation

China plans to tax grain and other basic food exports in effort to curb inflation

China will levy taxes next year on exports of basic food products such as wheat and soybean, the Ministry of Finance said Sunday.
The tax is an apparent effort to slow a surge in food prices by encouraging producers to sell more at home. It will also apply to corn, rice, and other basic products, the ministry said in a notice on its Web site.
The export tax will range from 5 percent to 25 percent.
The step added to a string of government measures to rein in food price inflation that soared to a monthly rate of 18.2 percent in November, driven by shortages of pork, grain and other items.
China recently canceled export tax rebates on wheat, corn and 82 other categories of grains. Beijing offers rebates on export taxes to various producers to promote exports.
The inflation surge has been especially hard on China's poor, who spend up to half their incomes on food.
Economists say they expect inflation to ease as a new grain crop comes to market and government efforts to encourage farmers to raise more pigs begin to take effect.