The following is a translation of this recent article posted on Southern Weekend. The article discusses the issue of low-priced housing available to public officials through their departments. In some extreme cases, public officials pay only 4% of the total market value, such as in the Xizhimen area of Beijing.
Throughout the country, housing prices have been rising steeply, so much so that the government has recently had no choice but to institute new policies to try and curb costs. The government’s hand has been forced in light of a recent publication titled “Public Officials Buy Houses at Astonishing Prices”, which after its publication became widely read throughout the internet. Compare the price [public officials pay] with the going rate for similar housing in the same area:
Housing for city officials in the Qiaoxi district of Shijiazhuang City costs 4,000 RMB/meter, where the market price is 30,000 RMB/meter. In Beijing, public officials can buy housing in Xizhimen, near the railroad tracks, for 2,000 RMB/meter. The market price in this area is 50,000 RMB/meter. Also in Beijing, the market price for housing in Guangqumenwai area goes for 35,000 RMB/meter, whereas public officials only pay 4,500 RMB/meter [….]
As soon as this publication was posted, it received a huge reaction [from the public]. But what has really caused public opinion to buzz is that the claims in this article have been verified. [Southern Weekend] has interviewed Beijing Institute of Technology professor Hu Xingdou, an avid observer of issues relating to fairness and justice.
Southern Weekend: According to what you know, is this type of situation common in Beijing?
Professor Hu: Many central government departments purchase affordable housing for public officials. They also build low-cost commercial housing. All of these houses are within the second and third rings of the city where costs average between 20,000 to 30,000 RMB/meter. If public officials are buying houses for only between 3,000 – 5,000 RMB/meter, then they are saving anywhere between 2 – 3 million RMB in total, and in some cases as much as 4 – 5 million.
SW: How do you view this phenomenon of public officials benefiting from limited housing costs?
Hu: This problem […] was very unexpected. It’s a classic case of using abusing public authority for private gain. It is a serious case of corruption.
SW: Some people say that this is a case of public officials legally benefiting [from their position]. How do you feel about this?
Hu: This is absolutely illegal. Public officials should [be treated] just the same as ordinary citizens—they should have to go out into the market and buy commercial housing. Their income is not any lower than others. There’s no reason for them to receive such benefits.
SW: Do public officials enjoy better benefits than ordinary citizens?
Hu: Public officials truly are enjoying better benefits than ordinary citizens. Such benefits include housing, government-issued cars, meal reimbursement, retirement funds, and medical insurance. The current system has turned public officials into a privileged class, which was inevitably brought about by the expansion of the government’s power. Such power has continued to grow since the introduction of policies to reform the country’s political and economic systems [starting in 1978]. This power has largely seeped into the market, and has not been restricted. Some central government departments are using their special power for private gain. Local government subordinates follow the example set by their superiors, and in many cases go even further.
SW: Will the new regulations suppress rising house costs?
Hu: In the short run, the policies will have some affect. Prices may go down temporarily. [The aforementioned government] departments have already halted this [corrupt] behavior. However, as soon as these rumors pass, this type of phenomenon may reappear. The root of the problem lies in [the fact that] there is no limit to the government’s power [….]
SW: [The government] has recently legislated the “Housing Protection Act”. What are your thoughts on this new regulation?
Hu: If it’s supervised well, it will be great [….] I think it ought to limit the housing that public officials can purchase, unless the public official in question falls within the lower-income bracket, but this is impossible.
SW: Many people say that the government will never issue laws or policies which limit their benefits.
Hu: The important thing here is that the government listens to and respects public opinion.
SW: Which country do you believe handles issues of housing, house prices, etc. well?
Hu: Actually, all countries handle this issue better than China. In Singapore, for example, 86% of citizens have adequate housing. In regards to affordable housing, both the public and the country have property rights […] so housing prices in Singapore are high, but everyone has the ability to buy a house. Aside [from Singapore], in northern Europe, in countries such as Sweden, protected housing comprises 30 – 40% [of the market], but in China it’s just 10%, and in some places [in China], as low as about 5%, with [much of the protective housing] being owned by the rich.
SW: Why is it that our country’s public policies aimed at [controlling] housing [issues] has failed?
Hu: The recent measures and steps taken have been treating the symptoms but not the root cause. These measures haven’t even started to touch the root of the problem, which lies in the government’s monopoly over the provision of land and high rate of taxes collected. The government collects taxes on about 60% of property. In Shanghai, they collect 64.5%. As such, the government’s profit needs to be controlled [….]
Getting back to the original topic, the favoritism showed to public officials in regards to purchasing low-cost housing belongs to a discriminatory system with Chinese characteristics. People with special power enjoy the benefits of protected housing. Ordinary city dwellers can only buy commercial housing, and country peasants rely on themselves to build housing. This is an issue we must breakthrough.
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