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China expands rural housing program to boost demand

(Xinhua)
Updated: 2009-03-09 09:15

The Chinese government has announced a massive plan to rebuild and renovate dilapidated houses in rural areas, aiming to improve people's life, create jobs and boost domestic demand amid the global financial meltdown.

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Qi Ji, vice minister of Housing and Urban-Rural Development, said on the sidelines of the ongoing annual parliament session that the country will rebuild and renovate 800,000 rural houses this year, which was expected to create 1.5 million jobs.

It was not available at the moment how much the government plans to spend in this program, which was announced at a time when the country's real economy is severely hurt by the financial crisis, resulting in export decline, factories shutdown and job losses.

Premier Wen Jiabao told the the annual session of the National People's Congress (NPC) Thursday that the country will"expand the pilot program for renovating dilapidated houses in rural areas"  this year.

The pilot program started last year in the southwestern poverty-stricken Guizhou Province. A villager named Liu Yonggao in Zunyi County, Guizhou, told Xinhua that he got a 10,000 yuan ($1,460) subsidy from the government and the reconstruction cost him 80,000 yuan.

"I also spend 20,000 yuan to buy home appliances including a color TV and a hi-fi system," he said.

Officials from the government of Zunyi City that administers the Zunyi County said every one yuan that the government subsidizes for the rural housing program would drive a 10 yuan investment from farmers.

It also brought about plenty of jobs. In Tongzhi County alone, more than 6,000 people, including 1,000 farmers who returned home after losing jobs in the cities, were working to rebuild or renovate rural houses.

More than 20,000 houses in Guizhou collapsed amid a rare snow and sleet disaster at the beginning of last year and 138,000 others were damaged.

The pilot program started after the government earmarked 260 million yuan and as of the end of the year more than 20,000 rural families have move to their new homes. Another 34,000-strong families in Guizhou are expected to benefit from the program this year.

"Farmers became enthusiastic to rebuilding or renovating their homes after knowing that they would receive money from the government," said Liao Guoxun, a Guizhou-based NPC deputy.

Guizhou Provincial Governor Lin Shusen, also an NPC deputy, said the central and provincial governments would set aside 10 billion yuan for the program this year.

Meanwhile, east China's Shandong Province last month kicked off a program to renovate 800,000 dilapidated houses in the coming five years. It also plans to build 750,000-1,000,000 new houses annually in the countryside in the coming three years.

Shandong Provincial Governor Jiang Daming said 270,000 new houses had been built annually over the past few years, with an average investment of 100,000 yuan for each house built or newly decorated.

Three million new houses would then mean an investment of 300 billion yuan, which would at least create 800,000 jobs, Jiang said.

China's consumer spending against economy size has been declining over the past ten years, experts said.

Premier Wen Jiabao said China is facing "unprecedented difficulties and challenges" as economic growth slows, employment pressure mounts and social uncertainties increase in 2009, the most difficult year since the new millennium.

China's economy cooled to a seven-year low of 9 percent last year, and broke a five-year streak of double-digit expansion, as the global financial crisis took its toll on the world's fastest growing economy.

In addition to a 4-trillion yuan stimulus package that was announced in November, the premier also proposed a budgeted fiscal deficit of 950 billion yuan for 2009, a record high in six decades and nearly three times over the last record of 319.8 billion yuan set in 2003.

Among the 4-trillion yuan stimulus package, 370 billion yuan will be used to improve people's life in rural areas.

When delivering a government work report at the NPC session, Wen said China must boost domestic demand to sustain economic growth. "We need to...make boosting domestic demand a long-term strategic principle and a starting point in stimulating economic growth."