Low-income house under construction in Wuhan China.

China acknowledged it was falling behind schedule on ambitious plans to build low-income housing, a delay that could add to concerns around its economy.

The low-income housing push is crucial, not only as a way to help ordinary Chinese buy homes, but to provide an economic cushion at a time when signs of a real-estate downturn are emerging. Prices of new apartments and the volume of construction have begun to fall in some cities. A big spurt in low-income housing construction has been seen by the government and markets as important to reduce the depth of a real-estate downturn in an economy heavily dependent on construction for growth. Beijing Friday pressed local governments to pick up the pace of construction.

A failure to meet the construction goals would add to risks of a sharp decline in Chinese property market, which in turn could slow Chinese growth more than expected and harm a global economy leaning heavily on China amid tepid recoveries in the U.S. and Europe.

China's real-estate problems come at a time when the country's foreign-trade figures also suggest a slowing economy. "Slowdown, not meltdown," read a headline on a report by HSBC on Friday after China reported a trade surplus of $13.05 billion. Although the surplus was 14.5% higher than in April, the numbers fell short of analyst estimates and suggested a weakening of domestic demand, according to some analysts.

Imports grew 28.4% in May compared to a year earlier, but Goldman Sachs argued that the big increase was largely because imports were weak in May 2010. Over the past three months, Goldman Sachs said, imports were down 4.6% on an annual basis, when adjusted for seasonal variations in demand. HSBC forecast that import growth would "moderate" due to slowing domestic demand and a "downshift" in international manufacturing.

Export growth, meanwhile, decelerated to 19.4% in May from a year earlier, compared to 29.9% in April.

During the past few years, China's turbo-powered economy has depended on a real-estate boom to power the construction, steel, cement and other industries and to act as an investment vehicle for Chinese looking for higher yields. But soaring housing prices have produced a real-estate bubble, and its collapse could batter the Chinese economy. Chinese economic planners have been trying put restrictions on purchasers to let prices decline gradually.

To make sure the restrictions don't crimp growth too much—and to make sure that housing remains affordable for many of China's 1.34 billion people —China committed in its latest five-year plan to building 36 million units of what it calls social housing by the end of 2015, including starting construction on 10 million units this year. If the plan works, 20% of urban households would have access to low-income rentals in 2015, according to UBS.

On Friday, though, the Ministry of Housing and Urban-Rural Development said that local governments must start construction on the units by November, pushing back by a month the date that construction was required to begin. By the end of May, work had begun on only 30% of the 10 million units, reported state-run Xinhua news agency recently.

Local governments have been slow to move ahead. Housing Minister Jiang Jianxin tried to turn up the pressure on the local municipalities when he released a statement Friday saying that social housing "is not only an economic mission, it is a political mission."

Five-year plans are full of goals, some of them firm commitments, others mostly guidance; it's often hard to tell the difference. The statement was a way of making clear that local officials would be judged by their ability to carry out the housing goals.

Ernest Ho, a Morgan Stanley analyst, said that the government needs a big burst of construction by the end of August to keep the program on track. That's because the plan was announced in March, and it takes developers between four to six months to line up the regulatory approvals and financing to start construction.

The program is beset by fights over funding. China needs at least 1.3 trillion yuan ($200 billion) to pay for the public housing projects this year, according to official estimates. Central and local governments are expected to pay for only about 40% of the cost, with the rest to come from businesses, residents and other local organizations.

Local governments often depend on land sales to fund their share of infrastructure projects. But they have little financial incentive to sell land for low-income housing, which will fetch lower prices from developers than land used for luxury apartments.

The Housing Ministry also said it was concerned whether developers would meet quality requirements, given the short time frame of the massive construction project. A Xinhua commentary last week criticized developers for using shoddy materials to cut costs.

It's also unclear whether the housing project will deliver the economic punch promised. UBS analyst Tao Wang estimates that as many as four million of the 10 million units will consist of dormitories and other older housing "reclassified" as social housing. Even if those units are renovated, they may not provide as much of a lift to the construction industry as new housing.