CHINA WILL spend €140 billion this year to build 10 million low-cost homes, a senior housing official told the country’s annual parliament, the National People’s Congress, yesterday, part of government efforts to narrow the wealth gap and ensure political stability.
Deputy housing minister Qi Ji told a news conference at the congress that the spending was part of a commitment to construct 36 million low-cost homes over the next five years.
“In the next few years, we are going to significantly improve housing conditions for urban middle- and low-income families, newly employed workers and migrants,” said Mr Qi.
Delegates from all over China are gathered in Beijing’s Great Hall of the People for the annual rubber-stamp parliament, which this year is focused on passing the 2011-15 five-year plan. The main elements of the programme are a reduction in the GDP growth target, a boost to renewable energies and finding ways to encourage domestic consumption.
The government is trying to rein in rapidly rising house prices, because the inability of many lower-income citizens to buy a house threatens to undermine political stability, against a background of an economy that grew by 10.3 per cent last year. The government blames speculators for the problem.
Price rises are slowing, slightly. In January, the price of newly built housing rose 6.8 per cent in Beijing and 1.5 per cent in Shanghai over a year earlier, but the problem is spreading to second-tier cities, many of which are seeing double-digit house price increases.
The government is also planning to regulate rental prices, and legislators were working on a “real estate law” to determine conditions and the rights of renters.
Rampant growth is causing other problems too, such as a shortage of labour.
This has been an issue in parts of the booming eastern coastal regions for several years, but human resources minister Yin Meimin said China’s labour shortage was expected to spread to central and western regions on the back of rising demand for migrant labour.
“It is a structural problem which mainly affected the labour-intensive manufacturing and service industries in eastern coastal areas. Now it seems to be spreading to central and western China,” said Mr Yin.
Some of the reasons for growing labour shortages were seasonal, but the overall problem is that demand rises with economic growth.
Increasingly, migrant workers were choosing to work near home or in their hometowns in the central and western areas as the regional economies develop rapidly. This new generation also has higher salary and welfare expectations, he said.
Bloomberg adds:President Barack Obama said yesterday he would nominate commerce secretary Gary Locke to be the next US ambassador to China, putting him at the forefront of managing one of the nation's "most critical" relationships.