Commodification of Shanghai's Housing Sector

Abstract

China's urban housing system reform is both a corollary and a component of the "restructuring" of the country's socialist political and economic system along the marketization principles. Reforms in the housing sector, as well as their outcome and implications, impact on and at the same time are influenced by the general process of change in China. The crux of the housing system reform is "commodification," a sibling or an offspring of marketization. Similar to the general political and economic reforms, the housing reforms engender a new management system in the production, consumption and allocation of housing; and necessitates, or at least testifies to the need for, further institutional changes, legislative reforms and above all, a changing role of the government. The housing reform has to some extent relieved the housing problems, but at the same time creates new ones. Some of these are transitional problems, while some are structural.

By employing the privatization theories and related concepts, this paper aims to analyze the extent and the manifestation of marketization in Shanghai's urban housing system and its impact and effect on institutional changes. In particular, the changing role of the government in housing provision will be assessed. It is envisaged that the government's role in housing production relinquishes most quickly, a superstructure conducive for market operation is developing rapidly, and mortgage instruments, however, remain largely undeveloped.