China's National Development and Reform Commission will do away with state price controls on 24 commodities and services, the NDRC announced.

The commission said on its website that market forces will determine the price of tobacco leaves, the last farm product to be placed under price control. Businesses could decide how much they would pay for tobacco leaves, but there is a minimum rate to protect tobacco farmers.

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In 1978, China started to dismantle state controls of the farm produce market. Tobacco price is the last controlled commodity. Beijing did keep its regulatory powers through state storage efforts, by setting minimum prices and handing out subsidies on several products.

The prices of transport services such as parcels, railway bulk cargo and private passenger and cargo transport will also be market-driven.

Sun Zhang, a professor with Tongji University, said the government has controlled train cargo and passenger prices, but they are a far cry from water and road transportation costs, which did little in developing the railway sector. Nine months ago, rail freight prices on the Zhunchi Railway were floated as a pilot for a more liberal regime.

Meanwhile, Shi Lixin, a researcher at the Institute of Economic Systems and Management, said the pilot had shown that private investors could take part in railway construction and set an example for price reform.

Prices of domestic air cargo, as well as prices of passenger transport of some airlines, will be allowed to be floated.

The deputy director of China Air Transport Association, Wu Tongshui, said the move will help shake up the market, land more private investment and boost the competitive edges of carriers.

The NDRC said limits will be removed on port service fees, including payment for container loading, water supply and ship rubbish treatment.

Limits will be dismantled for factory prices of explosives for civil use. The NDRC is tasked with preventing high price volatility and checking out market order after controls are lifted.