China will work to enforce macroeconomic control measures in grain production, Cao Yushu, deputy secretary-general with the State Development and Reform Commission, said in Beijing Monday.

While addressing a forum on China's economic situation, Cao said despite an increase in grain production in 2004, there are many hidden problems in the sector.

It is crucial to keep the grain price at a reasonable level in condition of new increase in grain output in 2005, Cao said. Grain prices directly affect farmers' income and the continuing rise of grain prices will result in the increase of whole price level.

The grain output in 2004 surpassed the targeted 455 billion kilograms and set a new record, but the 2003's output had been the lowest since 1992.

Cao said with a growth rate of about 25 percent, China's investment in fixed assets remains excessive. Adjustments are needed for the irrational investment structure in fixed assets, which leads to many problems in the national economy such as oversupply in some sectors.

(Xinhua News Agency January 18, 2005)