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Housing Fund Needs to Be Inclusive

NewsChina, Chinese Edition June 15, 2020

By NewsChina Updated Aug.1

On May 18, China’s State Council released a directive to improve the market economy in which the central government vowed to reform the public housing fund, a type of social insurance established in 1999 to help Chinese employees save money to buy a home. Statistics showed that deposits held in the housing fund amounted to 14.59 trillion yuan (US$2t) in 2018. To date, 33 million housing fund loans were issued by banks, benefiting 55 million homebuyers. Over the years, most employees who benefited from the housing fund are those working for the government, public institutions and State-owned enterprises, but workers at private enterprises, in particular the vast number of migrant workers, are excluded from the scheme. Experts argued that housing fund reform should focus on groups who are in urgent need of the fund, and that it is high time to increase interest rates applied to deposits in the housing fund, as well as coordinate the withdrawal system in different cities.