"This is the benchmark of our housing policy," said Wang, who was appointed as minister late last month after leaving his post as Beijing's deputy mayor.

Wang was speaking on the first day of a two-day meeting in Beijing organized by his ministry to review its work last year.

He urged governments at all levels to build more adequately priced houses for those families who cannot afford expensive ones.

"House prices in some cities are unreasonably high," Wang said. "It has curbed the enthusiasm of housebuyers."

The minister also pledged to enhance the enforcement of the State's housing policies, conduct comprehensive research into the policies of housing taxes and fees, and to use taxation to promote the construction and purchase of low-cost houses.

The ministry will continue its efforts to ditch unfair fees included in house prices and construction costs and will encourage the construction of smaller houses instead of more expensive luxurious homes, Wang said.

"Fluctuations in house prices have been inevitable in recent years, but the house prices will come down gradually in the long term," said the minister.

The average price of a house in Beijing reached 4,771 yuan (US$576) per square metre last month, a 25.8-percent jump over December 2000.

However, the per capita income of Beijing residents increased by only 10 percent.

Recent figures released by the National Bureau of Statistics indicate that the average house price nationwide last month was 2,304 yuan (US$278) per square metre, an increase of 11 percent over December 2000.

China has adopted a market-orientated so-called hierarchical housing policy. Rich buyers can get large apartments or villas; low and middle-income families can buy more modest apartments; and impoverished urban residents can rent houses with a government subsidy.

China used to regard housing as a kind of welfare for city residents and only charged a nominal rent.

Wang said the housing reform in recent years has fuelled China's real-estate industry, which has made a considerable contribution to the national economy.

Official statistics indicate that China earmarked 485.7 billion yuan (US$58.5 billion) in real estate in the first 11 months of 2001, making a year-on-year growth rate of 29.7 percent. Of this investment, 340 billion (US$40.9 billion) has been channelled into house construction, 30.5 percent higher than the investment for the same period of 2000.

(China Daily January 8, 2002)