The Chinese government plans to stick with its policy of controlling prices, according to reports.

State-run media reported that Vice Premier Li Keqiang said, "The market is entering a critical period, so we must stick to the policy stance of curbing [the] overly fast increase of housing prices."

The South China Post said in its Tuesday editions that some China-watchers had expected the government to ease its controls in 2012 so housing prices did not slump and adversely affect economic growth.

"Construction of affordable housing will give a large boost to consumption and investment, which are key to China amid the global economic slowdown," the Journal quoted Mr. Li  as adding. "It matters a lot to maintain China's stable and fast economic growth."

Forbes magazine had reported earlier this month that housing prices in China were diving.

"The country’s largest builders began discounting homes in Shanghai, Beijing, and Shenzhen in recent weeks, and the trend has now spread to second- and third-tier cities such as Hangzhou, Hefei, and Chongqing," Forbes contributor Gordon G. Chang wrote on the magazine's website.