Homeownership dream far from coming true in China – Chicago Tribune

2022-06-15 21:36:55 By : Ms. Linda Lian

A Chinese worker looks at the skyscrapers on a street in Beijing.Millions of Chinese workers who have contributed to China's economic flourishing find it almost impossible to buy a home in that city due to the cost-income disparity.WANG ZHAO/GETTY (WANG ZHAO / AFP/Getty Images)The dream of owning a home for Chinese peasants who migrate to the city in search of work is far from being realized, with wages below $1,000 and house prices at astronomical levels.An apartment can cost up to a million dollars, but the government hopes that the construction revival will increase supply and lower prices.Liu Jun, a former peasant who works as an electrician and plumber, is part of the 250 million Chinese who provided the necessary workforce for China's economic takeoff and today aspire to better wages and a better future.The work of this workforce - construction workers, bulldozer and crane drivers, technicians of the most varied trades - stimulated the economic growth of China, which recently became the world's second largest economy.The internal migrant is free to work in all sectors and throughout the country, but his social rights - education, health and housing - are limited to his home town, to which he remains administratively linked through the "hukou ".That system of permanent residence permits, similar to an internal passport, in force for decades, deprives migrants of an important part of the prosperity they helped create.Their children are often forced to stay in the village - in order to go to school - at the care of grandparents or other family members.At the same time, real estate construction, the engine of Chinese economic growth, has been experiencing a catastrophic situation for two years.Potential new buyers are shut out of the market by soaring prices that government credit-restrictive measures are failing to contain.The authorities now aim to solve both problems simultaneously, reforming the "hokou" system, so that migrants can buy housing in the city where they work, and stimulating the real estate supply.Only 10% of migrants own property in the city where they work, according to the World Bank.But without "a certain number of stimulus measures, the effects will be limited," says Brian Jackson of the IHS Economics institute.Liu Jun, a native of Lankao in the poor central Henan province, earns just 6,000 yuan ($920) a month in Beijing, where the average price per square meter is 34,925 yuan ($5,300)."I would like to stay, but I don't have money to buy," Liu says resignedly.The "hukou" reform bill, unveiled last week at the end of a meeting on economic planning in the presence of President Xi Jinping, will in principle allow migrants to acquire "an urban identity."The real estate boom, fueled by loans and public spending, gave rise to the proliferation of new neighborhoods.However, many have become "ghost towns" and many urban areas are saturated with empty, unsold accommodation.Home sales decreased 7.8% in 2014 in China.This destabilizes the financial situation of the promoters and, consequently, slows down investment, which could aggravate the crisis in the sector.