From Chinese Press

High housing prices erode benefits of China's security net

(Xinhua)
Updated: 2010-06-29 14:14

Also in June, the ministry expanded the home appliance replacement subsidy to 28 municipalities and provinces from the nine existing pilot areas, which is expected to boost domestic spending by 150 billion yuan (22 billion U.S. dollars) from June this year to the end of 2011.

But even those fortunate enough to have climbed on to the home-ownership ladder find that no amount of subsidies can help them spend.

Chen Hua, a 41-year-old migrant worker from Jiangxi Province who bought a house in Beijing after working in the city for more than 10 years, has no intention to buy a car or new home appliances.

"I have to repay my mortgage, send money to my two kids in my hometown, and save the rest for their future education in Beijing," says Chen.

"I know our economy needs more domestic consumption, but most people around me still cannot spend money without worrying."

A survey of urban depositors in the second quarter issued by the People's Bank of China this month showed 46 percent of respondents wanted to save money, while 36 percent said they preferred investment in stocks and securities.

Only 18 percent of respondents were confident about spending money.

The survey also showed that 72.5 percent of respondents believed housing prices were "too high to be acceptable." Housing prices in the country's 70 large and medium-sized cities rose 12.4 percent year-on-year in May after an increase of 12.8 percent in April, the highest rise since July 2005.

But experts say the country's housing security system, under which the government, employers and workers each contribute to a home-purchase scheme, was far from satisfactory.

Yang Lixiong, a professor of social security at the Beijing-based Renmin University of China, wants the government to consider housing supply and the market in its housing security system.

"Governments at all levels should focus on providing low-rent and affordable housing. Housing is part of the social security net and it should be public welfare," Yang says.

Both high-educated young people with well-paid jobs and elderly people with pensions would have greater purchasing power without the burden of soaring housing prices, Yang says.

In fact, many elderly people with pensions and homes already have no hesitation in spending money.

Zhang Guoqing, a retired worker in Nanjing, says he feels secure since buying a 67-square-meter home at a low price two years ago. She and her husband spend half their income on daily necessities and the other half on travel.

Luo Yan says the lifestyle of elderly couples like Zhang and her husband is her dream.

"We need to build a home of our own, and then we can enjoy life as a family." Enditem