China’s Li Says Affordable Housing Tests Government Credibility
February 08, 2012, 6:02 PM ESTBy Bloomberg News
Feb. 8 (Bloomberg) -- Vice Premier Li Keqiang said the government’s ability to distribute affordable housing fairly will be an important test of its credibility.
Li, a candidate to replace Wen Jiabao as China’s premier after a leadership transition that begins later this year, called on the public and the media to supervise the process to make it more transparent, according to a report by the official Xinhua News Agency yesterday.
Li made the remarks Feb. 6 at a conference where leaders from Liaoning province and the cities of Shanghai and Chongqing gave reports on their allocation of housing, Xinhua reported. China aims to add 36 million units of affordable or social housing by 2015 as it seeks to address a widening income gap and public anger over high property prices.
“Fair distribution of the houses is the lifeblood for the success and sustainable development of the program,” Li said, according to Xinhua. About 10 million of those homes were planned for last year and 7 million for this year.
Li has been a champion of affordable housing. In April, the official Communist Party magazine posted a speech he gave saying that China’s construction of low-income homes will boost supply and stabilize the housing market like a “sedative.”
The government has sought to rein in the China’s property market on concerns an asset bubble in real estate may derail economic growth and that rising prices may spur social unrest as fewer citizens are able to afford homes. That effort has included limits on mortgages, home purchase restrictions and the construction of affordable housing.
Prices Fall
China’s home prices fell for a fifth month in January. Wen said Jan. 31 that the government will maintain curbs to bring prices down to a reasonable level.
The World Bank endorsed China’s social-housing plans in April while saying the financing would need to be managed to prevent a spike in local-government debt. Standard Chartered Plc estimates that the plan to build 36 million low-cost homes will add 2 trillion yuan ($318 billion) to local government borrowing by the end of this year.
China’s Communist Party will gather in late 2012 for a congress held once every five years, at which President Hu Jintao and Wen are scheduled to hand power over to a younger generation that includes Li and Vice President Xi Jinping. Li is in line to replace Wen as premier, according to analysts including Willy Wo-Lap Lam, an adjunct professor of Chinese history at the Chinese University of Hong Kong.
--Editors: Nicholas Wadhams, John Liu
To contact Bloomberg News staff on this story: Bonnie Cao in Shanghai at bcao4@bloomberg.net
To contact the editor responsible for this story: John Liu at jliu42@bloomberg.net
