Anchor: China's consumer price index has risen sharply since last August. The index hit 8.7 percent in February, marking a 12-year high. The Chinese government is now testing various means of stabilizing prices to prevent the price hike from turning into widespread inflation. Our reporter Michael Lee has the details.

Reporter: During this round of price hike, the prices of pork, edible oils and other foods contributed to 80 percent of the CPI increase. This kind of price hike has a direct influence on ordinary people's lives.

"The price of eggs is 3.3 yuan today. Tomorrow, it will be 3.5 yuan."

"The price has been too high for us ever since last year."

The present price hike in China is a structural rise caused by an increase in agricultural product prices. It differs from the all-around, continuous, and spiral inflation. Chinese Premier Wen Jiabao said last month that the government's primary task this year is to control prices and suppress inflation.

The impact on low income families is a major concern of the Chinese government. Zhou Wangjun is the deputy director of the Department of Prices under the National Development and Reform Commission.

"The State Department has increased the subsidy to the low income strata three times since last August. So far, the subsidy for each city dweller has risen an average of 44 yuan. The measure has had a positive impact on easing the pressure cause by mounting prices. There will be further measures to ease the pressure on low income groups."

The Chinese government is taking other measures to prevent the food price increase from turning into an overall rise in prices.

To deal with the surging price of pork, the government has increased support to the industry and has instituted a pork reserve system. Pig production is making marked progress under the plan. China's new administration has also decided to increase support to the agricultural industry, increase the purchase price of grain, and offer large subsidies to grain farmers to stabilize market prices.

At the same time, the Chinese government plans to tighten the monetary policy and strengthen credit management.

The government has also taken measures to temporarily intervene in the pricing of some important commodities, in a bid to curb hoarding and speculation. Zhou Wangjun says that these measures are gradually taking effect.

"The price situation began changing in mid-March. For instance, the price of edible oil is falling by a big margin. Say, the 5-liter bean oil. Its price has fallen by 22.6 percent."

According to statistics released by the Ministry of Commerce, the prices of meat, eggs and vegetables have all been gradually falling. The prices of pork, beef and mutton have kept falling for three consecutive weeks. In addition, the prices of vegetables have also fallen for six consecutive weeks due to warmer weather.

In this year's government work report, the Chinese government proposed to maintain the annual CPI at 4.8 percent. Analysts say that as long as the policies can be executed according to plan, the Chinese government has a good chance of achieving its goal.

Michael Lee, CRI News.