ABSTRACT
Introduction The role of the state, non-state actors, and their relations in welfare provision has been under constant debate in both academia and policy practice. In particular, housing has become increasingly a “wobbly pillar” of the welfare state, with debates over whether it should be regarded as a pure commodity or as a right (Torgersen 1987; Malpass 2008). For countries that are in political and economic transition, it often means moving away from treating housing as an inherent part of state welfare provision toward commodification and marketization of housing, whereas the state only plays a residual role or “enables” welfare pluralism. Part of this process involves driving the processes of policy-making and implementation increasingly to the local level, which brings up the question of whether it results in improved or undermined local social service delivery (Hayek 1945; Musgrave 1959; Rondinelli et al. 1989; Stepan 2000; Wu 2013: 33). In China, the market reform since 1978 has been accompanied by rapid urbanization. In urban areas, the housing sector was gradually commodified. Most urban residents now have to purchase or rent their home on a commodity housing market, instead of living in apartments provided by their work units. The process of housing commodification is sometimes considered as quite similar to neoliberal reforms in transitioning and developing contexts. Nonetheless, there are several distinctive characteristics that should be noted. First, while the economic reform started as early as 1978, the urban housing reform proceeded at a much slower pace and experienced several rounds of experimentation before fully taking effect in 1998. There is, furthermore, at least a partial deviation in the official discourse in recent years, from the dominance of market logic and a clear developmental perspective, toward a more balanced approach to growth and equity. The question, nonetheless, is whether such changes in policy discourses have resulted in changes in actual implementation of these policies across localities. Second, housing reform in China as an incremental process is highly interdependent with other reform initiatives, such as fiscal decentralization and reform of the state-owned enterprises (SOEs) (Gu 2001: 133-136; Huang 2012: 949-954; Wu 2013: 33). As a result, policy changes or delay in implementation in one area may have profound effects in reforms in other areas, since these processes constantly reshape the interacting institutions and interests in each
policy domain. While fiscal decentralization may result in increasing disparities between the interests of central and local governments, the SOE reform was implemented in a way that only large and powerful SOEs survived and became more profit-seeking, with the welfare burden of taking care of every worker now largely relieved (Davis 2003: 183; Zhang and Rasiah 2014: 59). Finally, while many symptoms of neoliberal housing reform appeared in the case of China, it is highly debatable whether market logic and consumerist values were ends themselves, or simply means to complement other economic reform initiatives and ultimately to serve the political legitimacy of the Chinese Community Party (CCP) during economic transition (Breslin 2006: 114; Wu 2010: 619). Both of these views are subjected to further tests with the proliferation of state and non-state actors involved in the policy process. In particular, the strong agency of municipal governments in implementing these policy initiatives raises the question of whether the reform process is now too decentralized for the central government to effectively implement its “grand designs.” This chapter aims at examining the evolving nature of welfare state reform in China and its relation to the changing state-society relations by looking at the case of affordable housing at both the central and local level. In particular, it seeks to examine how the roles of the central and local governments have evolved in relation to each other, in carrying out policy experiments and major policy changes. The case study of Shanghai indicates that there are significant disparities between policy changes at the central and local level. Granted more autonomy and flexibility in recent years, the municipal government in Shanghai has increasingly adapted central policies to its local initiatives.
