Housing is also a key source of new jobs. The number of construction workers has been growing at an annual rate of 6.6 percent, and hit 2 million last year. Overall investment in housing reached US$447 billion in 2008.

Although housing is not one of the 10 key industries targeted for revitalization by the government, it has been a hot topic at the annual sessions of the NPC and the Chinese Peoples Political Consultative Conference (CPPCC) in the past two weeks.

Xu Jiayin, the chairman of Evergrande Real Estate Group and also a member of the national committee of the CPPCC, recently called on the central government to control land costs, taxes, and profits of real estate companies in order to cut housing costs.

Xu also suggested lowering or abolishing the 100 or more different taxes paid by the real estate industry.

The government has already cut interest rates five times, eliminated several taxes, and provided a 30 percent discount on some mortgages.

After several years of explosive growth, there is no doubt that China's real estate market is in for a correction. Vanke, which had predicted that the market would hit bottom this year, now says it expects things to get better in 2012. Other analysts suggest that a recovery may take as long as five years.

But almost no one expects the bottom to fall out, as it has in the US. Lenders in China have been far more prudent than their American counterparts. A 20 percent down payment is mandatory; Chinese borrowers typically have impeccable credit, and no one is pedaling derivatives.

If Chinese developers adjust their profit margins and keep housing affordable, the market will stabilize, according to Yi Xianrong, a researcher at the Chinese Academy of Sceinces. China must keep in step with the global economy and learn from it, he said.

(China Daily March 16, 2009)