The Chinese government on Tuesday issued new rules aimed at tightening land supply in another bid to prevent overheating of the economy.

The new rules warn local leaders that they will be penalized if they fail to stop or investigate illegal land sale cases in areas under their jurisdiction, according to a State Council notice.

Under the new rules, the use of farm land for construction purposes will no longer be approved by the State Council for each project, but should be reported to provincial governments and submitted to the State Council for approval on an annual basis.

Land management authorities must keep a closer watch on local governments and stop land supply applications from local governments that may breach regulations, according to the notice.

Civil servants who have violated the land supply rules shall be disciplined and prosecuted if they have broken the law, the notice said.

The Ministry of Supervision in collaboration with the Ministry of Land and Resources and other central departments shall soon launch a nationwide crackdown on irregularities in land supply, the notice said.

China recorded an economic growth of 10.9 percent in the first half of this year on the back of a 30-percent growth in fixed asset investment, both the highest in recent years.

In its bid to prevent a possible economic meltdown, China has repeatedly raised the benchmark interest rate and clamped down on unauthorized investment projects.

The government believes that illegal land supply is a leading cause of the runaway investment.

A survey of 16 cities by the Ministry of Land and Resources last year showed that nearly 50 percent of the new land under development was acquired illegally. The figure was as high as 90 percent in some cities.

(Xinhua News Agency September 5, 2006)