ABSTRACT
Although housing reforms since 1979 have substantially improved the living conditions of urban residents in China, many major cities are still plagued by poor housing standards and acute housing shortages. Even after two decades of reform efforts, many urban residents continue to rely on work units for housing because they cannot afford to buy or rent in the private market. Urban governance is now more chaotic than in the late 1990s since the process of rural-urban migration has reached a new level of complexity, closely associated with the issue of political instability arising from a national policy of uneven development between the rural and the urban sector. To alleviate the housing problem and to improve urban governance, the government introduced the housing monetarization policy (HMP) in 1998 to replace the old in-kind welfare housing system. The housing function of the work units (danwei) is to be gradually taken over by the market, or what Davis (2003) termed “the recommodification of urban housing.” Unfortunately, this policy is premised on a problematic assumption-the belief in the capacity of the market to solve the housing problem. Although the government is well aware of the all too familiar perils of such a precarious project-one that possibly leads to a chain of events involving first a property bubble, to be followed by an economic crisis caused by rapid asset devaluation, dwindling wealth, and then squeezing homeowners to foreclosure as they lack the means to repay bank loans. Nonetheless, the neoliberal turn in housing development in China is still
being heralded as a one-size-fits-all method in urbanization and economic development. Using a neoliberal perspective and data from a case study of HMP implementation in Guiyang, this chapter argues that housing reform in a neoliberal direction is likely to create more housing inequalities than HMP originally sought to reduce. Moreover, with more private housing investment, China has set herself on a familiar course of urban change which currently besieges many governments in the West-the marginalization of the urban poor as a result of rapid urbanization. Such new socio-spatial segregations will give rise to a new set of urban problems and conflict situations which may be more serious than those which the housing reform set out to resolve (Wang 2004). In this chapter, we shall first discuss the early process
of housing privatization and also the background leading to the HMP in 1998. There then follows a discussion of the neoliberal turn in China’s urbanization and its resonance with what is happening in the West. We then focus on Guiyang as a case study, highlighting HMP’s theoretical roots and why it is considered essentially part of the neoliberal turn. Finally, we conclude by discussing the limitations of the model on eradicating housing inequalities and its broader implications for urban poverty and social segregation.
