The number of complaints lodged with the Ministry of Construction has skyrocketed. More complaints related to homes demolished to make way for property developments were filed in the first half of this year than in all of 2003.

"As of June 22, about 18,620 people contacted the Ministry of Construction to appeal for help. That has already surpassed the total last year of 18,071 people," says a Beijing News report.

The ministry confirmed that in the first quarter of this year, the number of complaints was triple that of the same period in the previous year.

A similar situation has developed at the Ministry of Land and Resources. Most of the complaints there are from farmers upset that their farmland had been taken away for other business.

The State Council said last month that China would demolish far fewer buildings this year to cut down on widespread and sometimes violent protests.

"Construction authorities should have had a clear mind towards the abnormal housing boom. In that period, half of the demand for land was met by demolishing old buildings," Vice Minister of Construction Fu Wenjuan told the Beijing News.

She attributed the growing number of complaints to increased urban construction, which has led to a rise in the demolition of old buildings.

"Some regional housing projects have exceeded local economic growth and local demand as well," Fu said.

As a result, some newly built urban public facilities have never been used; the land and money spent was wasted.

"Problems have thus been triggered by local authorities who borrow money for such construction," she said.

Adding insult to injury, some local governments or companies affiliated with them have reduced compensation for residents forced to move, or forced them to move quickly.

"This hurts the credibility of the entire society," Fu warned.

The ministry started moving to allay fears of a collapse in China's booming property market, saying prices would continue to rise gradually during the rest of the year.

Xie Jiajin, director of the ministry's property department, said on China Central Television that the property sector was "returning to a rational path" and that there was no possibility of a market collapse.

Xie's remarks came after figures were released showing a slight slowdown in the growth in property investment and prices.

The rise in real estate investment in the first five months of this year was 2.6 percentage points lower than that of the January-April period.

The increase in the total area of newly developed land throughout China in the first five months was 12.4 percentage points lower than that of the first four months.

New residential construction starts slipped 0.6 points compared to the January-April period.

Although the average price of residential property in big cities like Shanghai and Beijing remained high, Xie blamed earlier price increases on speculative buying.

She predicted residential property prices would grow steadily in the coming months, pushed by strong demand from people buying properties to live in rather than for speculation.

To hold back the rapidly developing sector, at the beginning of the year China began putting in place measures to tighten loans extended by banks to the sector, control land supply and restrict demolitions.

(China Daily July 6, 2004)