For the past five years, Chinese Leader Deng Xiaoping has instituted sweeping economic reforms, moving away from rigid state controls and closer to the free-market system. Capitalism advanced a step further last week when the government announced that price controls in Peking would be lifted on more than 1,800 food items, effectively raising their costs by some 50%. The price reforms had already been introduced in 22 other cities and autonomous regions.
Peking's 5.5 million residents will receive a subsidy of 7.5 yuan a month (l5% of per capita income) for a year to help pay the higher prices, but that...