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BEIJING, December 31 -- The Chinese government has decided to raise tax rates on urban land use by two times from those set in 1988 in a bid to rein in the excessive development of urban land.

Premier Wen Jiabao signed an order of the State Council on Sunday to revise the provisional regulations on taxes on urban land use issued in 1988.

The increased tax rates will be applied to domestic businesses, foreign-funded enterprises in China and foreign companies.

China's economy grew 10.7 percent in the first three quarters this year, with fixed assets investment surging 27.3 percent.

The government believes checking excessive growth of credit and land supply could be an effective way of cooling the economy.

Measures have been taken to tighten land supply in the second half of the year, including higher taxes on urban land use and stripping local governments of their authority to spend the money from land sales.