Chinese authorities have drawn up a policy to restrict foreign investment in the country's property market, the China Business News reported Monday.

It quoted a well-informed source as saying that the document had been signed by the Ministries of Construction and Commerce and four other central departments, and submitted to the State Council.

The State Council would decide when the document would be issued or enforced depending on the development of market, the report said.

The Ministry of Construction declined to comment when contacted by Xinhua, though senior officials from the ministry and the State Administration of Foreign Exchange had earlier confirmed the proposed policy to the media.

According to the report, only foreign businesses with offices in China or foreigners who had worked or studied in China for more than one year would be allowed to buy property for self-use.

Foreign businesses looking to invest in housing development would be required to obtain approval from the Ministry of Commerce and be licensed by the State Administration of Industry and Commerce.

The source said the last item would effectively stop hot money from entering the property sector.

The government has been keen to cool the wild property market, as it has sparked grave public concern over housing security and is fueling the fast expansion of investment and bank lending.

It is widely believed that foreign money is partly to blame for soaring housing prices in major cities, though the current system makes it hard for the government to have a reliable figure on the actual size of the foreign investment in the sector.

The State Administration of Foreign Exchange (SAFE) is already working to improve its international payments statistics system to enable tracking of "hot money" into the country.

China previously had rigid controls on house renting and purchases by foreigners, but the restrictions were removed in 2002.

An earlier report by the China Securities Journal quoted a report by the International Monetary Fund as saying that 137 of the IMF's 187 members had restrictions on the acquisition of real estate by foreigners.