China is poised for a surge in the construction of affordable housing that it hopes will revive the slowing economy in the second half of the year.
Beijing entered 2011 with a pledge to start building 10m units of state- subsidised housing, an initiative meant to assuage public anger about soaring property costs and to help those left behind in the booming economy. But at the year’s midpoint, the government, which is unaccustomed to missing its economic targets, is only about a third of the way there.
Local authorities are expected to foot a large part of the bill and they have complained that Beijing’s aggressive monetary tightening in the face of persistent inflation has left them short of cash. Trying to address those concerns, the National Development and Reform Commission, a powerful central planning agency, said last week that it would allow provinces and cities to issue bonds to fund the development of affordable housing.