(Ecns.cn)--The benchmark Shanghai Composite Index plunged 2.63 percent, or 64.57 points, to end at 2,391.23 on Wednesday after Premier Wen Jiabao vowed China will not relax its efforts to regulate housing prices.
"If we develop the housing market blindly, a bubble will emerge in the housing sector. When the bubble bursts, not only the housing market will be affected, it will burden the entire Chinese economy," warned Wen at a press conference after the conclusion of China's annual parliamentary session.
The current housing prices are still far from falling back to a reasonable level, asserted Wen, and reasonable housing prices should match people's incomes, the construction cost, and of course, reasonable profits too.
Wen's words indicated that there is still room for housing prices to dip, and following the meeting stocks related to the real estate and cement industries tumbled.
The Shenzhen Component Index slumped as well, by 3.19 percent, or 332.35 points, to end at 10,094.89 Wednesday.
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