China plans to allocate 6.8 billion yuan (US$951 million) in its 2008 budget to build low-rent houses for urban poor, Premier Wen Jiabao said on Wednesday.

The amount is 1.7 billion yuan, or 33 percent, more than last year, Wen said in his report to the First Session of the 11th National People's Congress that opened at the Great Hall of the People in central Beijing.

Local governments are required to increase funding in this area, he said.

The government will also build more affordable houses and tighten the management on them to ease housing difficulties of low-income urban residents, the Premier said.

A set of tax, credit and land supply measures will come out to increase supply of reasonably priced housing, curb demand for high-end housing and prevent overheating in housing prices, he said.

Provided that China has a large population and relatively little land available, Wen said the country has to turn to small and medium-sized condominiums that are environmentally friendly to conserve energy and land.

More land will be provided for such projects, he said.

"We must ensure that the government and the market both play their due roles," the Premier said.

The government will give priority to housing for low- and middle-income families while housing demand among high-income families will be met largely through the market, he said.

Attempts to hoard and speculate land and houses will be watched by the authority, he said, "We will deal with violations in accordance with the law."