China's top economic planner has called for doubling of the annual investment of 200 billion yuan (about HK$186.1 billion) in low-cost residential property. This type of property investment was expected to become a new growth engine for the country's economy in the years to 2000, Xinhua (the New China News Agency) reported yesterday. The Minister for the State Planning Commission, Chen Jinhua , said development of residential property and the construction industry should take precedence over other industry, agriculture, and transport. China has experienced a glut of luxury apartment buildings and villas few can afford, while millions of Chinese families are waiting for affordable housing. Mr Chen's remarks followed the recent spate of mainland media reports in which officials forecast a revival in real estate which has been lethargic for three years due to the austerity programme. Tight monetary policies introduced in mid-1993 were intended to curb rampant speculation in the luxury commercial and residential property market. Mr Chen was reported saying low-cost residential housing development, unlike other industries, would not injure people's living standards, the environment, or the economy. He said China's current annual investment in residential properties came to about 200 billion yuan, accounting for less than 1 per cent of the total expenditure of Chinese consumers. That figure was down from about 1.9 per cent in the past. Mr Chen said that proportion should be increased by 1 per cent, which means the annual investment should double to 400 billion yuan. Huge market demand, created by the added investment, could trigger development of such related industries as steel, building materials, cement, timber, chemicals and electrical home appliances, Mr Chen said. His remarks came after senior construction and bank officials unveiled measures to speed up home ownership by providing better mortgage terms, among other incentives. Last week, officials outlined measures including extending five billion yuan in loans to build low-cost housing in the second half of the year and proposing to extend the length of mortgages from the maximum 10 years to 20.