China will fine individuals and companies up to 2 million yuan (295,000 U.S. dollars) for circulating misleading or false information about price hikes, the country's top economic planner disclosed Tuesday.

The announcement by the National Development and Reform Commission (NDRC), the top economic planning agency, was part of efforts by the NDRC to curb price manipulation and profiteering in the country.

The suggested punishment measures to combat commodity hoarding and forcing up prices are now open to public debate until Aug. 13, after which it will be submitted to China's top legislature for a legislative reading, the NDRC said in an announcement on its website.

In case of serious offences, those who break the price regulations will lose their business licenses and be subject to confiscation of their illegal gains and receive fines up to five times their illegal gains, the NDRC said.

The NDRC further said it believed the price regulations would be helpful to handle the inflationary expectation and stabilize price levels.

Earlier this month, the NDRC set up two offices dedicated to control monopolistic behavior and curb market manipulation while it fined a number of farm produce traders in northeast China for conspiring to push prices higher.

The hoarding of goods was mainly to blame for skyrocketing prices of garlic, mung bean and other farm products this year, jeopardizing the Chinese government's goal to keep the annual consumer price inflation at 3 percent in 2010.

China reported a 3.1 percent consumer price index year-on-year increase in May, exceeding the government's CPI growth target for the first time this year.

Last month the NDRC projected that China's CPI rate would be around 2.6 percent in the first half of this year. The National Bureau of Statistics has yet to announce the CPI data expected to be released this week.