To continue stabilizing housing prices, the Chinese government will not change its strict policy in the real estate industry in the latter half of this year, Vice Minister Liu Zhifeng of Construction was quoted as saying by the Guangzhou-based Times newspaper Thursday.

Spokesman Zheng Jingping of the National Bureau of Statistics made the same announcement at a press conference Wednesday on the first half-year's economy.

"The focus of the next stage of macro-control policy is to stabilize policy, enhance supervision, deepen reform and optimize structure," Zheng said.

China will not loose its current macro-regulatory policy in the latter half of this year, but this does not mean a stricter policy will be promulgated in the near future, said Liu in Guangzhou, capital city of southern Guangdong Province.

Two months ago seven government departments issued a joint circular in an attempt to stabilize the rocketing housing prices in China.

According to the new policy, private houses sold after being inhabited for less than two years must pay business taxes according to the whole sale price. The circular also demanded that local real estate administrative departments make clear requirements on price levels and housing sizes before giving permission for land use, stressing reducing construction costs for affordable housing and restricting developer profits to 3 percent.

Shanghai and Hangzhou, the cities which experienced the most dramatic price hikes, saw prices lower by more than 5 percent immediately after the policy was implemented.

Although the current market regulatory policy has made preliminary achievements, many problems still exist in the domestic real estate market, and the growth of real estate investment in some regions is still too fast, said Liu.

"The scale of the fixed asset investment is still a bit large," said Zheng at Wednesday's press conference.

In the first six months this year, eight provinces and autonomous regions witnessed their growth rate of real estate investment exceed 40 percent, according to report of the Guangzhou-based Times newspaper.

Housing prices in general are still high and in some regions, the average housing prices still grow too fast, Liu was quoted by the newspaper.

The growth rate of real estate investment has declined, however, Liu said.

Between January and June, investment in the real estate industry of the country rose 23.5 percent, a drop of 5.2 percentage points year-on-year, according to latest figures released by the National Bureau of Statistics on Wednesday.

Thanks to the new policy of seven government departments, the sales housing area is less than the area constructed for the first time, said Liu, noting that the average growth rate for housing prices across the country has slowed down.

Although the Chinese government will continue its strict policy already promulgated to curb fast rising housing prices, Zheng promised that "Investment in the real estate sector won't be affected by the country's macro-regulatory policies."

"The real estate industry in the country will still maintain a rapid and stable growth rate in the latter half of this year," said Zheng.

(Xinhua News Agency July 22, 2005)