China not to loosen regulations on housing market

Premier Wen Jiabao said Wednesday that the country will not slacken its efforts in regulating housing prices, which he considered still "far from a reasonable level."

"If we develop the housing market blindly, a bubble will emerge in the housing sector. When the bubble bursts, not only the housing market will be affected, it will weigh on the entire Chinese economy," said Wen at a press conference after the conclusion of China's annual parliamentary session.

The reasonable housing prices should match the people's income, the construction cost, and the profit should be reasonable too, added Wen, calling for long-term, steady and sound development of China's property market.

The people's housing demand is rigid and durative as China is a big country will 1.3 billion people, and in the stage of rapid industrialization and urbanization, according to Wen.

"We have set the target of providing adequate living space for the people, but this does not mean that each one has to own a home," said Wen. "We will continue to encourage people to rent houses."

Wen called for fully exerting the fundamental role of the market in allocating resources, saying that at the same time the hand of government is indispensable, as it can promote stability and social equality.

China's real estate industry witnessed great development over the past yeas, but the skyrocketed housing prices have triggered public complains.

"I feel deeply distressed by such complaints from the people," Wen said at the press conference.

While delivering the government report at the Fifth Session of the 11th National People's Congress (NPC), Wen said regulation of the real estate market is in a crucial stage.

The housing market concerns fiscal, financial, and land policies of the government as well as the interests of businesses, so that reform in this sector has encountered massive resistance, according to Wen.

He added that the regulations in recent years have paid off, as the government has a very firm resolve, and has been able to curb speculative and investment driven demand with focused measures.