Members of the public are concerned that many people on high incomes have been able to buy into economical estates because of a lack of a reliable national system that differentiates the rich from the poor.

But experts and officials say the criticism should not influence the government's decision to expand its construction of affordable housing.

"Basically, the housing policy is sound and the problem lies with the sale process," Tong Yuezhong, deputy director of the Promotion Centre for Housing Industrialization under the Ministry of Construction, told China Daily.

Official statistics show up to 80 per cent of urban residents are low and medium-income families and 1.56 million urban households do not have enough living space.

According to government regulations, economical housing is built especially for low-income urbanites. The low price of the homes comes from the State's favourable policies for real estate developers.

Tong said the policy had helped many people move into more suitable housing and had been warmly welcomed in many cities.

But some residents are concerned about the programme.

"In some of the budget residential communities in Beijing, luxury cars are not rare, some people even own several apartments in the community," said 28-year-old Xiao Yu, who bought an apartment in Beijing's Tiantongyuan Community.

Xiao insisted that rich people buying into the estates have not only taken away State welfare, but have also had a negative impact on the sale of regular commercial apartments.

The government is considering making changes to the process.

Earlier this month, the State Development and Reform Commission, Ministry of Land and Resources and Ministry of Construction started a joint investigation on the development and management of the housing system in 11 provinces and municipalities.

"The investigation will help us make the policy flawless," Tong said.

Another Ministry of Construction official said the departments controlling the regulations for the housing should close loopholes to ensure the State's favourable policy go to where it is most needed.

More than 100 million square metres of low-cost housing -- more than half the area of all new homes -- is built in China each year, statistics show.

(China Daily April 1, 2003)