The Economic Information Daily reported Tuesday that Wu Jinglian, an expert with the Development Research Center of China's State Council, or Cabinet, said excessive lending and liquidity would be a long-term problem for the economy rather than liquidity shortages and weak demand.

Wu, 79, was one of the first economists to promote the market-oriented economy in China.

"A credit boom along with a loose monetary policy and positive fiscal policy could prevent the economy from collapse in the short term, but these measures cannot solve the underlying problems," he said.

A total of 8.92 trillion yuan (1.3 trillion U.S. dollars) in new loans were pumped into the economy in the first 10 months based on a moderately loose monetary policy, far exceeding the government's target of 5 trillion yuan for the entire year.

Wu said excessive lending and re-leveraging would produce risks and bring the country's economy back to the days before the economic crisis. "The frothy property market can be taken as a sign of a new crisis and deserves great attention," he said.

Home prices in 70 medium and large cities rise 3.9 percent from a year earlier and 0.7 percent from September, according to data from the National Bureau of Statistics last week.

A report from the Chinese Academy of Social Sciences (CASS) also expressed the same concern, forecasting that property prices would stabilize in the first quarter of 2010 and rise on expectations of inflation in the second quarter.

"Speculation is the main reason behind the current price hikes," said the CASS report.

Wu said too much investment in fixed assets was not a good idea despite the fact that China's economic recovery was still largely dependent on property market.

"The real drive behind China's recovery is the accelerating fixed-asset investment and record lending rather than the slow rise in domestic consumption, and this imbalance will be a drag on the country's economic restructuring," he said.

China's fixed-asset investment surged 33.1 percent year on year in the first 10 months to 15.07 trillion yuan as China rebounded strongly from the unprecedented crisis.

Government data showed the real estate sector accounted for more than 20 percent of urban fixed-asset investment, a key driver of China's economic recovery.

Wu called for more government efforts to address the excess liquidity and boost economic restructuring, so as to ensure long-term development "especially when we have achieved the rebound with short-term policies".

Pei Changhong, head of the Institute of Finance and Trade Economics at the CASS, also suggested that Chinese economy refocus in 2010 from expansion to structural adjustment while continuing the stimulus plan.

China's central bank said last week in its quarterly monetary report that the government would continue the relatively easy monetary policy while stepping up "efforts to balance inflation perception and economic growth."

The H-shares index, initiated in August 1994 and readjusted on Sept. 7, 2009, tracks the overall performance of 44 major Chinese mainland state-owned enterprises listed on the Hong Kong Stock Exchange.

The Hang Seng China H-Financials Index fell 5.70 points, or 0.03 percent, to close at 19,161.94.

The H-Financials Index, initiated on Nov. 27, 2006, readjusted on Sept. 10, 2007, tracks the performance of nine major banks and insurers of the Chinese mainland.

The Hang Seng Mainland Composite Index rose 4.61 points, or 0.11 percent, to close at 4,238.05.

Introduced on Oct. 3, 2001 with the latest readjustment effective on March 9, 2009, the Hang Seng Mainland Composite Index gauges the performance of 132 Hong Kong-listed companies with principal places of business in Hong Kong and the Chinese mainland.

The Hang Seng China-Affiliated Corporations Index moved up 8.18 points, or 0.20 percent, to close at 4,131.17.

The index tracks the performance of 34 locally listed companies with a significant equity interest held by entities in the Chinese mainland.

Xinjiang Beixin Road and Bridge Construction Company Limited is one of large-scale highway project working enterprises in Xinjiang with the first-class qualification, focusing on high-class highway project working business. In 2008, its operating income reached 1.647 billion yuan with the net profit of 41 million yuan.

    The benchmark Shanghai Composite Index rose 0.13 percent to open at 3,287.26 points.

    The Shenzhen Component Index climbed 0.08 percent to 13,681.9 points at the opening.

    Overnight, The Dow Jones rose 0.29 percent, or 30.46 points to 10,437.42.