This is the "main task" of housing departments during the 10th Five-Year Plan (2001-05) period, according to the Ministry of Construction.

Ministry statistics indicate the average living space was 10 square metres at the end of 2000.

A ministry official said that over the next 10 years, there exits great potential for development in the housing sector.

"There will be a fast period of housing development before 2005 as we strive for 23 square metres for each urban resident," said Xie Jiajin, director of the Department of Housing and Real Estate under the ministry.

According to economic models, residents will invest more in their properties if their average annual income reaches US$800 to US$1,500, Xie said.

"There exists a big gap between China and developed countries in terms of living space, which itself means a tremendous potential for development," Xie said.

He said housing prices are relatively high in China, and called on departments concerned to help cut prices while also trying to increase the income of residents.

According to a World Bank standards, rational housing prices should be three to six times a family's annual income.

Xie said China would speed up housing reforms and apply advanced technology in housing construction.

In the next five years, China should try to increase the trade of new and used houses.

Xie added that the expansion of house rental markets is another priority of housing authorities.

The government will build more low-cost houses to rent for low- and middle-income families.

Currently, the government gives housing subsidies to staff in the state sector, which helps spur the property market.

The state will also strengthen the reform of building firms with China's entry into the World Trade Organization (WTO), another official said.

"Whether in terms of capital or technology, the scale of Chinese real estate firms cannot compete with those of developed countries," said Fu Tao, secretary-general of the China Alliance of Housing Enterprises.

Fu said the development of alliances among domestic enterprises would help them adopt more advanced technology and reduce building costs.

Apart from the general planning of cities and high-level real estate projects, most Chinese construction business is expected to open to foreign investors after China's entry into the WTO.

(China Daily 03/23/2001)