In the country, the State is the only owner of the land and citizens can only purchase the right to use land.

"It took the country 14 years to establish a promising land market, realizing the paid transfer of land-use rights, but it should take longer, as well as greater efforts, to complete and regulate it with equity," Guan said yesterday.

The greatest obstacle to improvements is the excessive influence the government has on the market.

"Under such circumstances, power abuse and corruption are inevitable, discouraging potential investors," said Guan.

A considerable proportion of land-related crimes in the past several years were committed by governmental officials at the grassroots level, according to statistics of the Ministry of Land and Resources.

Excessive power of government on the real estate market is also a prime reason for extraordinarily high fees on real estate development in the country, experts said.

While marginal costs, mainly in the form of governmental fees, make up only 10 per cent of real estate prices on average in developed countries, it makes up 40 per cent in China.

Guan applauded the No 11 decree by the Ministry of Land and Resources, which defined a standard process for public bidding for the use of land.

He believes the new regulation, which becomes effective on July 1, will help reduce inequalities due to corruption.

Although most provincial regions have adopted public bidding in the transfer of land-use rights, the practice varies based on governmental regulations.

Some investors complained that they were at a disadvantage as local governments either held back necessary information or decided the winner of bids behind closed doors.

Only 5 per cent of land use rights were transferred through public bidding last year.

(China Daily June 25, 2002)