The Chinese Communist authorities recently introduced a pilot program for housing pension schemes in 22 cities, which has continued to provoke public backlash. Official statements attempting to dispel rumors of using citizens’ money for this initiative have been met with skepticism. On August 27, state media unusually posed the question in a headline: “If policies are for the good of the people, why are the people not appreciative?” Online users mocked the Communist Party, expressing deep-seated fear towards the notion of “doing good for you.”
Analysts suggest that the introduction of the housing pension scheme by the Communist Party is a result of accidents in self-built homes, aiming to shift the blame onto homeowners nationwide and potentially seize about 10 trillion yuan of people’s assets. Despite the Party’s efforts to present the scheme in a favorable light, the public, having suffered numerous losses before, no longer believes in the Party’s words.
In an article published on August 27 by the Economic Observer Network under the supervision of Jinan Daily Newspaper Group, it stated that although the government proposed setting up a housing pension fund to improve housing maintenance mechanisms, the public’s reaction was heated: “Will it come out of our pockets? Is this a disguised form of real estate tax?” The article pointed out several reasons why the public remains skeptical: lack of awareness, lack of understanding, and lack of trust.
Under this article, netizens derided the Communist Party’s claim of “doing good for the people”:
“Establish more departments, nurture more corrupt officials, sit in air-conditioned rooms and find ways to drain the blood of the common people.” “Who told you it’s for the people’s good? Shameless boasting.” “Over the years, the people have deeply feared the ‘doing good for you’ rhetoric.” “Why don’t people trust? Because of excessive and frequent fleecing.” “In short, the government is out of money. No matter the policy, there will be a pension scheme for everything in the future.”
Moreover, netizens commented: “What does it show? It shows a loss of credibility, and the people have been cheated and are afraid! Instead of reflecting on the fundamental reasons, they blame the people for not understanding!” “All policies that claim to be for your good are just finding ways to collect money. How much money do the people have? Do you know? Even if you extort it all, can you rest easy?” “They are beasts that devour people without a conscience, can they still have a conscience?”
This controversy initially stemmed from the announcement by the Ministry of Housing and Urban-Rural Development of the Communist Party of China on August 23, stating that 22 cities, including Shanghai, would pilot housing inspections, housing pension schemes, and housing insurance systems. After facing skepticism online, the official magazine of the Ministry of Housing and Urban-Rural Development, “Architectural Society,” clarified in an article that the proposed public account by the government would not require contributions from the public. However, netizens questioned the source of funds.
On August 26, officials from the Ministry of Housing and Urban-Rural Development further explained through state media that the public account could be funded by methods such as fiscal subsidies or land transfer fees. Nevertheless, both mainland netizens and overseas experts believe that ultimately the burden of funding would transfer to the general population.
Economist Li Hengqing, of Chinese descent, expressed to Da Ji Yuan that in many major cities in China, there are many houses older than 30 years that require significant financial investment for maintenance. The government’s current proposal for this fund has not gained public trust because homeowners are already required to have personal accounts established at the time of house purchase, explicitly designated for house maintenance; now the usage of these funds is unclear.
Li Hengqing believes that the money is probably long gone since the government likely used it when faced with financial difficulties. He doubts that the newly introduced housing pension scheme will actually be directed towards house maintenance and repairs. He emphasized the lack of oversight in ensuring funds are used appropriately.
Regarding the official explanation that the public account for the housing pension scheme could be funded through land transfer fees, Li Hengqing explained that this likely refers to the remaining money from land sales and returns on investments. However, he believes this money has already been exhausted. Given the financial difficulties faced by various regions, the authorities are unlikely to use resources to support citizens in home repairs, which the public is now well aware of.
An article by The Paper on August 28 introduced the concept of the “housing pension,” which originally surfaced following the self-built house collapse incident in Changsha, Hunan on April 29, 2022, resulting in 54 fatalities. Subsequently, the Ministry of Housing and Urban-Rural Development issued the “National Special Rectification Plan for Self-Built Houses,” mentioning the need to explore the establishment of a housing “pension” system. This system has been mentioned several times by official sources since then.
The independent media outlet “Lao Man Channel,” which has been monitoring China’s economy for a long time, analyzed on August 27 that after several official mentions of the system post-2022, it became the basis for the recent policy announcement. What began as issues with self-built homes has now transitioned to shifting blame onto commercial homes, a logic deemed absurd.
According to the program, the Chinese government shows little interest in rectifying legal loopholes within the self-built housing sector and rather targets the long-established trillion-yuan property maintenance fund in the commercial housing sector to upgrade it into a housing pension scheme, allowing the government to take over the funds for centralized usage. In the future, both commercial and self-built homeowners will be required to contribute to specific maintenance funds, with the government supposedly adding some funds for coordination, enabling them to exploit as they please.
The analysis by “Lao Man” revealed that among China’s urban and rural housing stock, there are around 20 billion square meters of self-built and commercial housing combined, along with approximately 10 billion square meters of unit-raised housing. This totals up to about 50 billion square meters. It is estimated that the repair funds from commercial housing owners, around 5 trillion yuan, and the impending 5 trillion yuan from self-built housing owners, amount to a total of 10 trillion yuan. The maintenance funds for the unit-raised housing, with generally longer building age, lack supervision, suffer from severe corruption, poor construction quality, and the funds have largely been utilized.
According to a 2023 report by the real estate research company CRIC, during China’s seventh national census, data showed that by 2020, China’s total housing area exceeded 50 billion square meters.
Chinese affairs expert Wang He expressed to Da Ji Yuan that the interpretation presented by Lao Man is just one perspective, and there may be deeper underlying factors at play.
He mentioned that China’s housing construction has seen significant development over several decades, resulting in over 50 billion square meters of housing, a considerable portion having poor quality. By the 2040s, approximately 80% of communities in China will become aged and deteriorated, posing significant maintenance costs. These communities fall under the jurisdiction of local authorities, and Beijing does not want to bear responsibility for them, hence proposing this policy which involves a tug-of-war between central and local governments.
He elaborated that the central government is shifting this burden onto local authorities. However, given the financial difficulties at the local level and the increased fiscal autonomy granted to them, they may utilize this policy to generate revenue. Wang noted that the authorities’ next steps and the evolving situation are subject to observation.
Regarding the continuous explanations offered by state media regarding the housing pension scheme, Li Hengqing believes that the Communist Party government is currently in a difficult situation and fears social unrest.
He remarked that the Communist state sees everyone as potential adversaries and preys on the masses, a characteristic that hasn’t changed throughout its over 70 years of rule. Li suggested that the public, having been detrimentally impacted by the Party, will not easily believe its claims of now acting in their favor.
Recent policies by the Communist Party that have sparked resistance include plans by the Ministry of Public Security and the Cyberspace Administration to introduce a system for internet certificates and identities. The authorities claim it is voluntarily carried out, providing “an additional safer and more convenient option, eliminating the need to repeatedly provide personal identity information to various platforms.” However, this has generated a significant backlash online. Although the regulation draft has passed the “solicitation period” (on August 25) and has been in trial implementation, no further official statements have been made.
Li Hengqing stated that there is an old Chinese saying, “Water can carry a boat, but it can also overturn it.” He emphasized that the danger of the Communist regime overturning has become increasingly imminent. The strong public discontent towards policies like internet certificates reveals that tens of millions of netizens are expressing opposition. Li indicated that the Communist Party has never acted in accordance with public opinion and may temporarily back off now, but it won’t entirely abandon its initiatives, as it seeks to reinforce control over the internet.
“The ordinary people currently lack the power to resist. As time passes, the balance of this power dynamic will fundamentally change. Those who follow public opinion thrive, while those who oppose it perish.”
Wang He also told Da Ji Yuan that after years of extortion by the Communist Party, people have seen through its tactics and are not easily deceived. He illustrated that the Communist Party, under the guise of beneficial motives, often distorts its actions, stating, “Every time the Communist Party promotes something under the veneer of goodness, it inevitably warps the outcome.” He cited the example of the 1998 housing reform, where the original plan was for 90% of the population to reside in affordable housing, and 10% in commercial housing. However, two decades later, almost 90% of the Chinese population resides in commercial housing (subject to mortgage), while less than 10% can access affordable housing, reflecting a complete reversal.
Wang highlighted that now, 22 cities have initiated the pilot for housing pensions. Despite facing strong public scrutiny, the authorities have not disclosed the outcomes of these trials to society, merely praising the policy without providing concrete information on its implementation, rendering the process opaque. He emphasized that the people, having suffered continuous losses, no longer believe in these claims.
This lengthy analysis delves into the intricacies of the housing pension scheme proposed by the Communist Party in China, reflecting both public skepticism and expert opinions on its implementation and potential consequences for the general populace.