China has been urged to take steps to control the unchecked expansion of its housing market. People's Bank of China (PBOC) economist Ma Jun said that there is a need to curb excessive investment flowing into the real estate sector. He noted that a third of the financial system leverage generated in China over the past decade resulted from housing price increase.

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Ma, the chief economist of the PBOC's research, was speaking to China Business News when he made the statement. The PBOC is looking to support growth in the sector without triggering excessive price gains. China's central bank has carried out various easing measures including a series of interest rate cuts. 

Ma stressed that state-owned companies should help in slowing down the rate of increase in debt levels in the economy.

Bloomberg reported that local officials in various Chinese cities such as Shanghai and Shenzhen have taken various actions to curb the trend. These cities are among the most active real estate markets in the country. The PBOC is now concentrating on tools which are more flexible and targeted. These measures include managing market liquidity and short-term lending opportunities.

According to Fortune, China is looking to achieve an average annual growth rate of 6.5 percent through 2020. This rate is required to meets the goals of the country's latest five-year development plan. At the moment, China is on track to meet this target. It is highly unlikely that the PBOC would resort to further easing as the corporate sector is already accumulating cash rather than spending it on investment opportunities. Any further easing is not expected to spur investments.

Tagspeople's bank of china, Shanghai, Shenzhen