"China's success in macroeconomic controls isn't permanent,'' National Reform and Development Commission chairman Ma Kai said in Beijing. "The foundation is still weak.''

China clamped down on lending to property, steel and other industries last year to cool investment that the government blamed for stoking inflation.

The government aims to slow growth to 8 percent this year, from an eight-year high of 9.5 percent in 2004, while capping consumer price increases at 4 percent, Wen said in his annual budget speech to the parliament Saturday.

``It's in local governments' interest to release land for commercial and industrial development because that translates into more revenue,'' BNP Paribas Peregrine Securities chief China economist Chen Xingdong said Monday.

``It's very hard for the central government to control those activities.''

Inflation, which eased to 1.9 percent in January from a seven-year high of 5.3 percent in August, may pick up again, Ma said.

Fixed-asset investment growth may also rebound, he said, echoing comments by Wen at the weekend.

``There's still concern that inflation will accelerate again,'' Beijing University economist Song Guoqing said at the weekend.

``The government will strengthen land controls this year as part of measures to curb investment.''

Wen announced plans Saturday to clamp down on urban infrastructure projects, shift spending to lagging rural areas and cut taxes for farmers, seeking to narrow the income gap between the 800 million rural dwellers and urban residents. Growth accelerated last year, helping to sustain global expansion and fueling a surge in world commodity prices.

The economy almost trebled in size in the past decade and its demand for raw materials helped fuel a 37 percent jump in copper prices last year and a 34 percent increase in oil costs.

Fixed-asset investment growth eased to 25.8 percent for the year, from 43 percent in the first quarter, while consumer prices rose at their slowest pace in more than a year in January.

``China's bid to curb inflation hasn't done much to reduce gains in real estate prices,'' DBS Bank Hong Kong economist Chris Leung said. ``Tightening credit to developers may be the most effective way to limit gains.''

Mainland housing prices rose by an average of 9.7 percent last year, according to the statistics bureau, contributing to an inflation rate that averaged 3.9 percent for the year.

Real estate investment climbed 28.1 percent to 1.3 trillion yuan (HK$1.22 trillion) in 2004, slowing from a 29.7 percent pace a year earlier.

Land conservation is ``a priority'' for this year, Ministry of Land and Resources Vice Minister Li Yuan said Monday.

The government plans to increase spending at a slower rate and sell fewer bonds for infrastructure this year to help cool the economy, Finance Minister Jin Renqing said in his budget report at the weekend.

Total spending will rise 13.7 percent to 3.23 trillion yuan and infrastructure bond sales will be cut by 27 percent to 80 billion yuan, the report said. BLOOMBERG