The State Council issued a circular on land conservation and improving the efficiency of land use Monday, in a bid to better protect arable land.

"With the quick pace of industrialization and urbanization, China is facing a sharp conflict between land supply and demand, so it is crucial to improve land use efficiency and protect arable land," the circular said.

Official statistics revealed that the country's area of arable land, which had shrunk by 4.6 million mu (306,700 hectares) in 2006 to 1.827 billion mu, was only slightly above the minimum of the 1.8-billion mu warning line set by the government.

The circular called on relevant government agencies to map out large-scale "scientific infrastructure" programs, tighten land use approval in both rural and urban areas and step up land market monitoring.

If land approved for development remains unused for more than two years, it should be recovered by the government according to laws and regulations. If the land remain idle for more than one year and less than two years, land developers should pay a 20 percent non-usage fee, the circular said.

"More than 70 percent of the land used for construction of urban housing should be designated for residential purposes for low-rent units, cheaper commercial homes and smaller units of less than 90 square meters," said the circular, a move to provide adequate housing for low-income families, against the backdrop of surging housing prices.

In a similar development, the country released the low-rent housing guarantee policy last November, which took effect on December 1, 2007, to help the country's ten million low-income urban families, whose living space was less than ten square meters per person, accounting for 5.5 percent of the country's combined households.

China also began to quintuple tax on the use of arable land for non-farming purposes and charge foreign invested companies as much as their domestic peers from December 1, 2007.