Bigger housing budget
Updated: 2008-03-08 09:07
The 2008 budget draft that the Chinese government drew up under a prudent fiscal policy shows that more funds will be put in the right places.
With the overall government expenditure projected to grow by 22.6 percent this year, an increase of 45.1 percent, 25.2 percent and 24.2 percent respectively in the central government's allocations for education, health care and social security, shows the authorities' commitment to better social welfare for the public.
A one-third rise in the central budget for low-rent housing is certainly above the average expenditure growth. But it is still far from enough to deal with the enormous housing problem.
The National People's Congress, the top legislature, should urge the government to increase spending on low-rent housing by a larger margin from a base that remains too low.
The central government plans to earmark 6.8 billion yuan (US$956 million) in its 2008 budget to build low-rent houses for the urban poor. The amount is 1.7 billion yuan, or 33 percent, more than last year. Local governments are also required to increase funding in this area.
China's housing prices have soared rapidly in recent years, making it increasingly hard for middle and low-income families to afford an apartment.
The average property price in 70 large and medium-sized cities went up 7.6 percent in 2007. And latest statistics indicate that the rising prices have not been slowed as expected. Property prices in these cities rose by 11.3 percent year-on-year in January, 0.8 percentage points higher than December.
This year marks the 10th anniversary of China's removal of its decades-old welfare housing system in 1998. Such a change has given a huge boost to the growth of the real estate sector that was supposed to improve people's living conditions in line with market forces.
While rapidly meeting the need of the few rich, the booming property market has largely ignored the demand of lower or many middle-income families for affordable houses, not to mention the urban poor's need of shelter.
The government's requirement on building more small and price-limit houses may increase the supply of affordable houses for the middle-income group. But to shelter all the urban poor, the government must immediately and dramatically boost spending on the low-rent housing program.
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