Chinese Government response to housing issues and inequality
The Chinese housing sector, which contributes to around 20% of the economy, faced substantial challenges due to stringent zero-COVID measures. These measures, along with declining confidence and stricter government regulations, pushed numerous real estate companies to the edge of financial ruin, causing concerns of them failing to meet their debt obligations. As a result, construction projects across the nation were put on hold, leaving property buyers in a state of uncertainty.
Some individuals were already making mortgage payments for homes that were incomplete, leading to public demonstrations where people protested by withholding their payments. In response, the government introduced a series of economic incentives and relaxed regulations to stimulate the housing market.
Housing Provident Fund
Since 1999, the Housing Provident Fund has offered workers a way to pay for their homes.
Those who pay into the fund can benefit from reduced mortgage payments or rent subsidies. Local governments set the level at which workers and their employers pay into the fund.
In 2020, three quarters of new accounts opened were for employees of privately-owned and foreign-owned businesses.
But many low-paid and migrant workers are unable to pay into the fund, as they are already struggling with money.
Most migrant workers are excluded from social housing and live in rented accommodation. Low wages mean they can only afford smaller, cheaper housing. Often this is in less accessible parts of cities, which means migrant workers must spend longer travelling to and from work.
