Chinese State-owned enterprises under the administration of the central government - so-called Central SOEs - have been ordered to "actively participate" in building government-subsidized homes, which is the country's top priority this year.
As part of its 12th Five-Year Plan (2011-2015), the central government pledged earlier this year to build 10 million units of government-subsidized housing in 2011 and 36 million units in total by 2015.
The government is believed to be under great pressure to find the money needed to support such a large-scale construction program.
"Central SOEs should take the lead and further increase their investment in building subsidized housing projects," the State-owned Assets Supervision and Administration Commission of the State Council said on Tuesday in a statement on its website.
In particular, the statement said those Central SOEs that specialize in surveying, designing and engineering construction should actively take part in building subsidized housing.
The government has been trying to lure more real estate developers in the construction of subsidized housing by offering them preferential policies such as building land, subsidies on interest payments, financing, tax breaks and the payment of fees.
The State-owned Assets Supervision and Administration Commission stressed the "quality first" principle in building subsidized housing, noting that Central SOEs should supply affordable building materials of high quality and increase the use of energy-saving building materials.
Analysts said the move is being seen as a major effort on the part of the central government to guarantee a viable financial foundation for this year's ambitious target for the construction of subsidized housing.
The country will need to spend about 1.3 trillion yuan ($197 billion) to build the 10 million units of government-subsidized housing this year.
To fund the work, the central and local governments will together provide more than 500 billion yuan, with the remainder channeled from social institutions and individuals, figures from the Ministry of Housing and Urban-Rural Development show.
The insufficient funding that stifled such projects in recent years will become an even greater obstacle in 2011, analysts have warned.
"At present, most enterprises have little interest in building subsidized housing because of its lower profits, which has led to such projects facing shortages of both money and construction workers," Li Chang'an, a public policy professor at the Beijing-based University of International Business and Economics, said on Wednesday.
The Central SOEs will take a leading role in such projects and their involvement will attract more local enterprises, he predicted.
"The Central SOEs ought to build 60 to 70 percent of government-subsidized houses to fulfill their corporate social responsibility," Li said.
"The central government needs to take compulsory measures to supervise this, such as holding Central SOEs accountable for certain tasks in the building of subsidized houses."
The combined net profits of the 121 Central SOEs was 209 billion yuan in the first quarter, according to statistics from the State-owned Assets Supervision and Administration Commission.
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