The Evolution of the Housing Market and Its Socioeconomic Impacts in the Post‐reform People's Republic of China: A Survey of the Literature

Abstract

Abstract. The development of the housing market in the People's Republic of China is not only a major component of Chinese economic growth but also has wide-ranging influential impacts on Chinese society. A burgeoning number of papers have examined the housing market in the postreform People's Republic of China from various perspectives. This paper aims to provide a thorough survey of the key literature in the field and then supply a complete picture of the dynamics of the housing market in the People's Republic of China. To assess the functional efficiency of this nascent market, we pay particular attention to the literature that is related to the academic debate over the Chinese housing bubble issue. The structure and operation of the housing market is another major concern in this paper. Finally, we summarize the key insights of the literature that we surveyed, note research gaps in the literature, and discuss further research directions in this field.

Housing, Wealth, Income and Consumption: China and Homeownership Heterogeneity

“…Second, the housing market in China has experienced a persistent and unprecedented boom since the privatization reform in 1998. Households are very confident relative to the robustness of housing equity (Chen and Han , Wu et al . , Chen and Wen ).…”

“…The 1998 housing privatization reform created multiple types of housing tenure in urban China. Those eligible to buy state housing units had three options: buy the housing unit with full property rights, buy the unit with partial property rights (by paying a prorated price corresponding to the share purchased) or decline the purchase opportunity, but continue to rent the unit at a very low rate (Wang , Chen and Han ) . The housing reform program thus created a housing market where five broad types of housing tenure coexist: sole ownership, partial ownership, market rental, rental from a work unit or close persons (family members, friends and relatives), and free or inexpensive rental from the state (cf.…”

Financing Affordable Housing Through Compulsory Saving: The Two-Decade Experience of Housing Provident Fund in China

“…Since the economic reform in 1978, the Chinese government has started to see the potential for a market-oriented housing industry to fuel the country's economic growth (Chen & Han, 2014). After two decades' housing reform, the Chinese government abolished the welfare housing system in 1998 to stimulate domestic housing consumption, a key strategy to counteract the negative shocks of the 1997 Asian financial crisis (Man, 2011;Wang et al, 2012).…”

“…Since 1998, China has had a sustained housing boom fuelled by robust economic growth, well-managed political stability, and rapid urbanization (Chen & Han, 2014). However, it has become increasingly difficult for young Chinese households to purchase their first home.…”

“…For almost three decades, housing policymaking in China was driven more by the need to promote economic growth than meeting the needs of the disadvantaged groups (Chen & Han, 2014). As a result, the post-reform housing policies have strongly favored homeownership over renting (Man, 2011), leading to serious inequity in policy outcome.…”