Companies must not collude to raise prices or reduce supplies, the government-backed All-China Federation of Industry and Commerce said in a statement.

The call came at a Beijing news conference attended by 24 of the groups that the federation represents, including the agricultural, fishery, pharmaceutical, bakery and textile sectors. Most are private firms.

It follows a decision by consumer products firm Unilever to heed a request from Chinese officials not to introduce price hikes.

Companies "must assume social responsibility, shoulder worries of the nation and ease difficulties of its people", the federation said, calling its membership the "biggest beneficiary" of China's economic reforms.

The move is the latest by authorities to control prices amid fears over the potential for rising costs to spark social unrest in China, which has seen inflation accelerate in recent months.

The State Council, or cabinet, on Wednesday renewed a government pledge to "do everything possible to maintain price stability" and "strictly control" speculative investment in the real estate market, according to a statement.

"This is the main task for macroeconomic regulation and control this year," the State Council said following a meeting chaired by Premier Wen Jiabao.

Beijing has introduced a number of measures including interest rate hikes to temper public concern over inflation, which remained stubbornly high at 4.9 percent in February -- above Beijing's 2011 target of four percent.

Consumer inflation for March, which is scheduled to be released on Friday, is expected to reach 5.5 percent and climb in coming months, Shen Jianguang, a Hong Kong-based economist with Mizuho Securities said.

Anglo-Dutch giant Unilever recently decided to "temporarily postpone" price increases planned for April 1 at the request of the National Development and Reform Commission, the nation's economic planner.

Unilever said in a statement it felt "deeply sorry" about Chinese consumers snapping up detergent and other household items in anticipation of possible price increases.

Taiwan's Tingyi Holding Corp, a producer of popular instant noodles and the Master Kong beverage brand, also said it would drop plans to raise prices for its noodles.

earlier related report
Hong Kong mulls land supply roll-out, prices jump
Hong Kong (AFP) April 13, 2011 - Hong Kong's financial chief said Wednesday that overall property prices had passed their 1997 peak in February and would look at introducing more measures to cool the city's red-hot market.

John Tsang's comments to lawmakers came as he outlined plans to boost land supply in the city in response to rising public anger over soaring house prices, which have become a major headache for officials.

"I am deeply concerned that overall property prices in February have surpassed the peak in 1997" before a property bubble burst. "If it is necessary, we will consider measures to further cool the prices to reduce the risk of a bubble," he said.

Luxury home prices topped their pre-Asian crisis peak in October, official data showed last year. Average luxury home prices in August were HK$142,249 ($18,300) per square metre, compared with around HK$122,500 before the 1997 crisis.

He added that property prices had increased 7.2 percent in the first two months of this year.

Tsang said the rise was caused by low interest rates, despite the fact that speculation, a major driver of prices previously, had slowed down.

Tsang said the government would release 12 sites in the southern Chinese city for development -- nine for residential purposes and three for commercial -- through tender or auctions between April and June.

He said the sites are expected to create 2,650 residential units.

The decision to sell off more land is the latest by Hong Kong, famous for its sky-high residential rents and super-rich tycoons, to try to cool the overheated market.

The government has vowed to continue studying the possibility of reclaiming land from the sea to tackle the densely populated city's land-shortage problem.

Previous measures, including multiple land sales and tighter mortgage lending rules, have failed to stem the soaring costs.

A study by US consultancy Demographia in January found Hong Kong's home prices were the least-affordable in the world, while the International Monetary Fund has warned of a potential bubble.

Property consultant DTZ in an annual report on global office occupancy costs last month also found Hong Kong was the world's most expensive city.

The average price of office property per workstation rose by almost a third from a year earlier in Hong Kong to $22,330, surpassing the 2009 leader, London's West End, according to DTZ.

-- Dow Jones Newswires contributed to this story --

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