Earlier Monday, the government announced new proposed rules to limit foreign investment in real estate in an effort to cool off the building boom.

Foreigners would face "restrictions on residential property purchases," Xinhua said, without giving details. It said developers would be required to invest more of their own money in projects to reduce heavy borrowing.

The rules are meant to "improve the efficiency of using foreign investment," Xinhua said. It didn't say when they would take effect.

China has had limited success in attempts to control frenzied building of factories, luxury apartment and other projects that has turned its cities into forests of construction cranes.

Investment from Hong Kong and other sources outside Chinaese mainland has poured into real estate.

Foreign investment in real estate rose 27.9 percent in the first six months of the year, compared with the same period of 2005, Xinhua said, without giving the total amount invested.

Investors apparently hope to profit from rising prices and an anticipated rise in China's currency, the yuan, which would push up the value of mainland assets in foreign currency terms.

SPURRING CONSUMPTION

Xie Fuzhan, vice head of the Development Research Centre, a think-tank under the cabinet, was cited by state media on Monday as saying China should raise interest rates and increase the yuan's flexibility to help tighten credit.

Hu stressed the need to rebalance the economy away from exports and investment towards domestic consumption to help sustain the country's economic growth.

"We should actively expand domestic demand to let it play a greater role in driving economic growth and expand consumption by peasants and low-income urban residents," he said.

Many economists say that a key obstacle to expanding consumption will be to improve the social welfare and health care systems so that low-income groups feel less of a need to save for a rainy day.

China would also take steps to bring greater balance to its trade, including pushing for exporters to move up the value chain, the agency cited Hu as saying.

The government is considering plans to cut tax rebates for exporters as part of a drive to wean the economy off of exports of resource-intensive products.

Hu also pledged to push reforms of state-owned enterprises and also deepen reforms in taxation and financial sectors.