Introduction

The Chinese government radically changed its perception of housing from a nonproductive welfare service to that of a commodity. Accordingly, various measures were adopted to stop SOEs from building and allocating accommodation for workers. Instead, workers had to satisfy their housing needs in the open market. The Chinese government has recently, however, openly admitted the limitations of the property market in addressing the housing needs of poor people. According to the Minister for Construction Wang Guangtao, the government acted to ensure the provision of housing for poor people, because ‘From our reform and explorations for more than 10 years, we have found that it's not enough to solve the problem of social inequity in housing by solely relying on the market mechanism’ (China Daily Online, 2007). The first part of this chapter gives an account of the Chinese government's efforts to privatise public housing, and the second part analyses the impact of market-oriented housing measures on the well-being of Chinese people.

Housing policy before the economic reforms

Before the economic reform era, housing in China was supplied by work units and local housing bureaux. This type of housing could be treated as ‘public housing’, because work units were state enterprises and the housing bureau was a department of the municipal government (Li, 2003, p 514). Central government and its various departments would provide ‘capital construction investment’ to work units for providing housing and other services. This production strategy could avoid delay because supportive services had already been included in the investment package (Wu, 1996).