BEIJING - Towns and small cities are the key to China's next chapter in urbanization and the government should promote healthy real estate growth there, Zhu Yilong, a member of the National Committee of the Chinese People's Political Consultative Conference (CPPCC), said Friday.

With China experiencing rapid urbanization, towns and small cities are becoming important links connecting big and mid-size cities with the countryside, Zhu said.

He said laws and regulations should be implemented to govern the land use approval and supervision process. A better legal environment in small and mid-size cities would help attract larger investors, thus spurring real estate growth.

Currently, the major investors in small and mid-size cities are township enterprises and individuals, neither of which are financially strong or professional compared with large companies.

Zhu also noted that poor or absent planning leads to low efficiency in the use of land resources. He noted that infrastructure construction and property management skills also lag behind in small cities and towns, thus putting a drag on real estate development.

Zhu pointed out that people's land rights should be respected and people should be properly compensated when land, especially collective land, is taken over for real estate projects.

Residents of small and mid-size cities should also have better access to mortgages, Zhu said.

Statistics show that 60 percent of migrant workers have moved to small and mid-size cities, creating a large demand for housing. Zhu said the government should make it easier for them to settle in cities.