"The local governments in Guangdong Province and its neighboring Fujian Province have already introduced temporary inspectors to curb price hikes caused by speculation," said Li Lei, director of the Pricing Supervision Department under the State Development Planning Commission.

Since the beginning of the outbreak of pneumonia carried by unidentified viruses, many Guangdong residents have scrambled for antibody medicines such as the Chinese herbal drug Radix isatidis and vinegar.

It is reported speculators in some regions have been selling medicines at prices dozens of times higher than the government-stipulated retail ceilings.

"Any unauthorized price hikes of medicines should be seriously punished," said Li. Apart from gaining illegal profits, the speculators have helped whip up panic among the public, Li added.

The pneumonia outbreak killed five people and infected 305 others in Guangdong Province but the provincial government says it has been brought under control.

Li did not give details about the temporary inspectors.

He revealed the measures yesterday at a press conference organized by his commission and the State Council Office for Rectifying Unhealthy Tendencies. The press conference was held to announce the government's achievements in the recent campaign against pricing irregularities for medicines.

Ten hospitals nationwide, including the Beijing-based Jiuxianqiao Hospital, were named and shamed for selling medicines at prices higher than the government ceilings or for other wrongdoings.

The commission is authorized by law to check on price irregularities.

Li said China has launched three massive campaigns to curb medicine price irregularities since 1998.

The government started the latest battle in the second half of 2002.

The six-month campaign found about 20,000 irregularities, which involved about 800 million yuan (US$96 million).

"The pricing situation in hospitals has changed a lot but further efforts are needed," said Li. "We still need iron-handed measures against possible wrongdoing."

He added that the government is considering making hospital drug counters independent from hospitals.

(China Daily February 14, 2003)