Governance and the housing question in a transitional economy, the political economy of housing policy in China reconsidered

Abstract

The reform of housing policy in China since about 1978 is closely linked to the reform that has occurred in the Chinese governance. The paper reviews this development in housing, focussing on the shift to a pro-market approach that has led to the commodification of housing. Key ingredients in this development have been the recognition of private property rights and the promotion of financial capital markets in the real estate/housing sector. Much of the change in housing is linked to reform of the ‘state owned enterprises’ (SOEs). Despite significant accomplishments, there exists the potential for future problems. There is at present a surplus of privately provided housing units in the country that have been designed for higher-income families. At the same time, despite a growing number of unemployed as a result of SOE reform and migration, there is an undersupply of low-cost housing to accommodate these groups. If not addressed, this inbalance could result in future urban social unrest.