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China Announces Housing Plan

People walk past apartment blocks on the outskirts of Beijing, March 9, 2011

People walk past apartment blocks on the outskirts of Beijing, March 9, 2011

China plans to spend nearly $200 billion this year to build 10 million low-cost homes and will regulate rents. A senior government official says the project and regulatory changes are part of a wider plan to temper surging housing prices and tackle growing inequality.

Chinese officials made a bold promise to spread prosperity to the country’s poor majority and ease the burden of surging housing costs Wednesday.

Deputy Housing Minister Qi Ji says the government’s five-year-plan to construct 36 million low-cost homes will kick off this year.

Rents will also be stabilized to rein in the booming property market.

Qi also issued a stern warning to government officials who fail to meet the ambitious targets. He says if home prices cannot be stabilized and the target of low-cost housing cannot be reached, social development and stability will be affected.

Qi says he wants to stop property speculators and offer the supply of public housing to poor Chinese seeking to become property owners. He says chief officials who fail to deliver on the plan will be investigated and summoned for official hearings to - as he says - seek their full responsibility.

Qi spoke at the National People's Congress in Beijing - China's annual parliament session. The main message this year has been social happiness. Part of that includes closing the widening wealth gap.

The majority of Chinese have yet to reap the full benefits of two decades of booming economic growth, especially in rural areas. Real estate prices have soared in the cities in the past few years, leaving millions of people unable to buy homes, or pushed out of older homes to make way for new developments.

A raft of measures - including higher wages and subsidies - have also been unveiled to tackle inequality and transform a nation of poor farmers and factory workers into a consumer society.