Houses in China - Part 10: Anjie

China Travel Services

Under the central planning system, the work unit provided for most of its workers' needs. Housing was the work unit's most important contribution. As the urban labour force expanded, it became ever more difficult for workers to find their own homes. Although there were many detailed rules for distributing houses, competition among workers was still fierce. Meanwhile, the real estate market faced barriers because of low salaries and the extensive welfare policy. As China switched to a market economy, the work unit system became an obstacle to progress.

Shanghai is one of the most crowded and developed cities in China. It is understandable that the commercialization of residential housing first began there. In May 1991, Shanghai issued the public accumulation funds system. It was a new and significant approach to housing management reform in China. What is more important is that it changed Chinese concepts of property ownership. In the work unit system, the workers do not own the houses they live in. The houses are owned by their work unit.

In 1994, the State Council of China began stepping up the reform of the housing system in urban areas. It declared that housing owned by work units would gradually be replaced by a housing system which was mostly commercial, though with welfare housing for unemployed workers. This included establishing public accumulation funds, providing housing loans and selling public houses. These changes greatly stimulated the real estate market in China. The relationship between individuals and their work units also changed.

The reform of the housing system witnessed the transition from a central planning system to a market economy in China. During the long process of reform, the Chinese gradually improved their living conditions. But we should not forget that wide disparities in the distribution of the costs and benefits of the reform also existed. Numerous people suffered in the move to commercialization. Building economical housing for low-income residents should be as high a priority as developing the real estate market.

( Source:CCTV.com)