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                      Housing Reform Faces Obstacles

    Housing reform, acknowledged by economists and politicians at home and abroad as central to China's economic reform, has reached a critical stage.
    A recent article in the overseas edition of the magazine Outlook remarked that China's housing reform is facing five obstacles. Major breakthroughs will surely come if these knotty problems are carefully and properly handled.
    Firstly, the old attitudes of the bulk of urban employees that it is the State's duty to provide shelter as a kind of social welfare has adversely affected their enthusiasm for participating in housing reform.

    Most people don't include housing on their shopping list. They think that they deserve State housing no matter how little they may have contributed towards it.
    Some of them consider commercialization or privatization of housing as being synonymous with taking money out of people's pockets and so running counter to the ideals of socialism.
    Secondly, the little money that workers, enterprises and governments at all levels have has affected the accomplishment of housing expectations.

    The per-capita monthly earnings of not more than 80 yuan in China's urban areas plus the continuous price hike of recent years has greatly lowered the citizens' ability to pay extra to buy a house and has reduced their incentive.
    It is difficult for enterprises to earmark large sums to support housing reform since many of them are not profitably run. The State, already in deficit, finds itself unable to subsidize the reform.

    Thirdly, the current housing reform will encounter social risks since those vested interest holders, most of them senior cadres, stand in the way of the restructure.
    Fourthly, the rocketing price of housing has tremendously dampened the enthusiasm of potential house buyer. In some large cities such as Beijing and Shanghai, the price has surged to record heights of around 2,000 yuan a square metre.

    Finally, the overall social reform environment has slowed the pace of housing reform. The present relationship of cost, wages, finance and social welfare system reforms has stemmed the housing reform since they are closely integrated.
    Based on the preceding problems, the article puts forward several suggestions on how to resolve them.