Urban expansion may be slower than last year, but it is still a national concern, said Minister of Construction Wang Guangtao on Monday.

"Many cities have shown a strong desire to increase urban construction and the pressure on the sector to heat up looms large," Wang said to construction authorities from across the nation during a conference in Beijing.

He urged local governments to slow the sprawl of urban areas, which are encroaching on the country's arable land and cutting into its resources.

According to a Ministry of Construction communiqué, as of the end of 2003 there were 660 cities nationwide and a total urban population of 338.05 million. Altogether, metropolitan zones covered 28,000 square kilometers.

In 2004, the government succeeded in controlling investment in urban utilities such as heating. In 2003, fixed-asset investment in urban public utilities was 446.2 billion yuan (US$53.9 billion). Between January and November this year, investment in utilities grew 23.4 percent, below the figure for total fixed-asset investment.

Tightening of land and credit supplies led to slower growth, said Wang.

Growth rates for the period in 2003 were not provided.

The government plans to encourage the building of more economy apartments for middle- and low-income homebuyers in 2005, said Wang. It is also considering ways to meet the housing needs of farmers-turned-workers in cities.

Currently there are 94 million such workers, but most of them share quarters in rented rooms or work sheds because of their low income. Household registration requirements also complicate economy home purchases.

Investment in low-income housing so far this year inched up 4.2 percent compared with 2003, while investment in real estate as a whole jumped nearly 30 percent.

"Real estate developers are eager to build villas and high-end apartments because of the large profit potential. They are less interested in economy apartment construction because of the tight profit margins," said Wen Linfeng, deputy branch director of the ministry's Policy Research Center.

The National Bureau of Statistics reports that in the first 10 months this year, total investment in real estate was 952.6 billion yuan (US$115.1 billion).

(China Daily, China.org.cn December 28, 2004)