BEIJING -- Two of China's top leaders have called for the nationwide launching of a controversial housing reform that would require Chinese to pay higher rents and allow some to buy their residences, replacing one of the main welfare benefits of Chinese communism -- virtually free city housing.
Acting Premier Li Peng and Vice Premier Yao Yilin, both members of the Standing Committee of the Politburo, said at a recent two-day meeting on housing reform that China is ready to begin the commercialization of housing, according to the official New China News Agency.
In terms of its effect on ordinary Chinese, the reform promises to be one of the country's most wide-ranging, instituting a commercialized, moderate-rent and self-supporting housing system.
One purpose of the reform, official reports said, is to eliminate a situation in which people in higher positions are able to obtain larger apartments at extremely low rent. Abuse of the system by high-ranking officials who obtain low-cost housing for their relatives is widely resented in China.
The scarcity of housing forces many young couples to live with their parents.
But the proposed reform has encountered strong resistance, particularly from city officials who have acquired extra housing space for their families.
"Mayors in a few cities turn pale at the mention of a housing reform," said a report in the official Economic Daily.
When the mayor of one medium-sized city in the northeast learned that his city might be chosen to lead a pioneering experiment in housing reform, he rushed to Beijing to urge the departments concerned to drop the plan, the newspaper reported.
According to a recent article in the Workers Daily, some city leaders have postponed the reform, which has been tested in several cities, because they were having new houses built and wanted them to come under the old low-rent regulations.
The government hopes to be able to construct more apartment buildings with the money received from increased rents and housing sales.
The housing reform is encountering opposition not only from local leaders who dislike the increased financial burden that comes with paying higher rents but also from some ordinary citizens who have grown used to subsidized low-cost housing.
At the moment, virtually all housing is owned by the government. State subsidies are so large that rent comprises only 1 to 2 percent of the average family's monthly spending.
According to the official news agency, the existing system now costs the state 30 billion yuan, or $8.1 billion, in subsidies each year.
Owning a private residence was banned during the Cultural Revolution of 1966 to 1976, and most Chinese do not have the money to purchase their own homes. But several thousand citizens of Beijing and Shanghai are reported to have bought their own homes over the past several years.
In the city of Yantai, the first city to experiment on a large scale with housing reform, residents have had their rents increased from less than a dollar a month to more than $10 a month. During this introductory period of the reform, the city compensates citizens with housing coupons to help defray the cost of the increased rent.
An additional 12 cities have been chosen to start the reform in the first half of this year. According to one report, the reform will take a total of 10 years to complete.
In another development, China on Tuesday reimposed price ceilings on basic raw materials to combat what the State Council described as sharply rising prices.
The price controls were reinstituted after two years of allowing producers to sell materials exceeding the state's quota at free market prices.
Analysts said the new controls mark a retreat in China's price reform effort, which two years ago was considered the key to the nation's economic reforms.