China plans new heavier fines for illegal developments as it seeks to better control a property sector beset by land disputes and unbridled investment, state media said yesterday.

Developments that have no planning permits or deviate from approved plans will be stopped and the builders fined 5-10 per cent of the project’s budget, the China Daily reported, citing a new draft law.

If developers refuse to halt construction, local governments will have the power to close down the building site and demolish the partially built development, the report said.

The draft law was discussed for the first time on Tuesday at the Standing Committee of the National People’s Congress, or legislature, according to the report. The move seemed to be another measure by the central government to rein in surging investment in the real estate sector, which soared 26.9 per cent from a year earlier in the first quarter of this year.

Minister of Construction Wang Guangtao accused local governments of blindly chasing urban development and approving ‘vanity projects’, according to the paper.

‘Misuse of land is serious in some rural areas, and current rural planning is inadequate and fails to meet the needs of farmers,’ Mr Wang said.

An overwhelming number of protests in China are triggered by farmers and city residents who have seen their land or property illegally seized by local officials, the central government has said previously.

According to the Ministry of Public Security, there were 87,000 protests reported in 2005, up 6.6 per cent on 2004 and 50 per cent on 2003.

Source: The Business Times, 26 April 2007