Ministry officals probe local property market
(AP/chinadaily.com.cn)
Updated: 2006-09-29 19:25

BEIJING - Cabinet officials are touring China to compel defiant local leaders to rein in out-of-control real estate development, state media said Friday.

Chinese leaders are trying to cool off a construction boom that they say could spark a financial crisis. But they say local leaders are failing to enforce building curbs and sometimes initiate their own projects.

Officials visited the major cities of Beijing, Shanghai, and Tianjin and other areas in nine provinces to order local authorities to comply with the controls, the official Xinhua News Agency said.

Yun Xiaosu, a deputy minister of land, told officials in the central city of Nanjing that "local governments should not defy orders given by the central government" that area meant to stabilize the market and guarantee a supply of reasonably priced housing, Xinhua said.

Yun also reminded the local leaders to enforce rules meant to ensure a supply of lower-income housing by mandating that apartments bigger than 90 square meters (970 sq. feet) can make up no more than 70 percent of new developments, the agency reported.

The report came after Shanghai's Communist Party secretary, Chen Liangyu, was dismissed Monday in a scandal over the possible misuse of city pension funds to finance real estate projects.

Also Friday, a Hong Kong magazine said some 300 auditors in Beijing were looking into possible corruption cases in the Chinese capital - more than the 200 auditors sent to investigate the Shanghai case.

One case involved the sale of a large tract near Chaoyang Park near downtown for just 210 million yuan (US$26 million; euro20 million), a price well below its market value, said the magazine, Asia Week, which didn't cite any source for the information.

Phone calls on Friday to the Beijing office of the Ministry of Supervision, which reportedly was carrying out the investigation, weren't answered.

The central government has raised interest rates twice this year, imposed curbs on new construction and banned some projects such as luxury villas outright in an effort to cool off the building boom.

Officials involved in visiting local areas this week came from the Ministries of Construction and Land and Resources, as well as China's top planning agency, the Cabinet's National Development and Reform Commission, Xinhua said.

They visited Liaoning, Inner Mongolia, Jiangsu, Jiangxi, Shandong, Hubei, Guangdong, Sichuan and Shaanxi.

A Ministry of Construction team arrived earlier this week in Shanghai to investigate real estate projects there, according to earlier reports by Xinhua.

In August, the central government publicly reprimanded leaders of the northern region of Inner Mongolia this week for building an unauthorized power plant. The punishment was widely publicized in the state press in a warning to other local leaders.