Economy >Guidelines and Policies
Housing Provident Fund System
The Housing Provident Fund System refers to the system concerning expenses on housing purchases and building and private house rehabilitation of employees’ families from the funds paid with long-term deposits by the state authorities, state-owned enterprises, urban collective enterprises, foreign-invested enterprises, urban private enterprises and other urban enterprises, and public institutions where the employees serve. As a social and policy-based housing guarantee system featuring mutual assistance, the housing fund system is for the benefit of housing financing and channeling and thus can greatly improve the commercial housing purchase capacity of employees.
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National housing bank should be set up: officials

China should establish a national housing bank to optimize the use of China's housing provident funds and stimulate the sluggish market, officials with the fund wrote in an article published Sunday in the Beijing-based Economic Observer newspaper. It is time for China to establish a policy-based housing financial institution, or a national housing bank, to boost housing demand to stabilize growth, Zhang Qiguang, head of the housing provident fund supervision department with the Ministry of Housing and Urban-Rural Development, said in the article co-authored with Cui Yong, another official at the same department. The property sector is still one of the key driving forces powering the world's second largest economy and sudden market contraction may trigger risks related with overcapacity, debt default and shadow banking, read the article in which the officials noted China's real estate market has experienced structural changes. The article proposed integrating the local housing provident fund regulators into a national housing bank to offer low-interest-rate housing loans to help middle- and low-income families afford houses. This will also reduce the financial burden on commercial banks and facilitate interest rate liberalization. The article also suggested including rural workers seeking jobs in urban areas into the housing provident fund system and offering government support to help them purchase houses. The housing provident fund is a government-designed saving plan that allows Chinese workers and their employers to pay a part of their monthly wages into the fund to finance future home purchases. Mortgages that are financed by the fund usually carry lower interest rates than bank loans. China has 342 local housing provident fund regulation centers across the country with more than 3.7 trillion yuan ($603 billion) in all accounts as of the end of 2014, according to the article, citing the latest official data.

Prediction of supply and demand of housing provident fund from the aspect of equilibrium warning

Abstract Housing provident fund system, as a housing security system of national policy, plays a positive role during the housing reform in China. Its equilibrium of supply and demand can affect its preservation, increment and sustainable development. In this paper, a prediction model is set up combined with appropriate predominant factors of supply and demand by the case-based reasoning method. The data of S city from 1999 to 2014 is analysed. The model can also evaluate equilibrium of supply and demand and spark early warning for the housing provident fund management institutions, and improve the mechanism. Keywords: housing provident funds, multivariate linear regression, supply and demand, prediction, case-based reasoning, CBR, equilibrium warning, housing reform, China, provident fund management

New national housing bank must avoid risk of toxic assets

But as the US government lowered lending thresholds in the property market, some homebuyers with low credit ratings also acquired mortgage loans. When US housing prices started to drop in 2006, the value of mortgage-related assets deteriorated and Fannie Mae and Freddie Mac saw their share prices slump. The US government finally took over the two mortgage giants, which were on the verge of bankruptcy, in September 2008. China is looking for a similar housing financial institution, which can provide new impetus for the property market. Setting up the national housing bank is also in line with China's reform of the housing provident fund system. The system originated in Singapore, and China first piloted it in Shanghai and then expanded it nationwide in 1998. So far, there are 606 housing provident fund management centers across the country. But the decade-old system has some problems such as low efficiency and inconvenience for homebuyers. China's housing market has cooled down since early 2014, with many cities including Beijing and Shanghai seeing falling housing prices. Some local governments have launched support measures to rekindle the property market, including canceling home purchase restrictions and relaxing mortgage policies, but the effect has been less strong than expected.

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1 Therefore, the establishment of housing provident fund system is the bounden duty of the people's governments.

2 Secondly, study the perfect housing provident fund system of our country.

3 China's housing provident fund system from the early nineties of the last century the establishment of housing system reform is one of the measures.