Local corruption rife as China races to build affordable homes
- By Ni Tao
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Shanghai Daily, August 5, 2011
Tightened budgets
While rags-to-riches stories made possible by relocation are occasionally heard, they are more the exception than the rule. Oftentimes rural dwellers are pushed off their land with brute force and offered a fraction of what the government would get by leasing the land to developers.
Judging from their record of mismanaging an already overheated economy by spending more on monstrous white elephants, many of China's local bosses do look like economic idiots. But the way they plot to maximize profits from land sales indicates otherwise.
With the provision of affordable homes for resettled rural dwellers now becoming a political imperative, some local officials are cracking their brains over how to dump that burden, or at least reduce its financial weight.
That's where the practice of skimping on construction materials and human labor comes in as an improvised way of cutting costs. Xinhua editorialized on Monday that many local governments considerably tighten their budgets for affordable housing so as to pocket the lion's share of land sales. Winning bids for these projects are thus kept low.
In a similar vein, after builders who get the job cut their slice, they subcontract it to numerous smaller players, who in turn cobble together unskilled workers and use inferior construction materials to squeeze whatever penny is left from this convoluted racket.
Well aware of the horse trading involved in the process, government watchdogs, being part of it, are both uninterested in and shy about regulation, Xinhua concluded. The article added that the root cause of jerry-built public houses is the official-developer nexus, and more damningly, the official tendency to pauperize the public.
It appears some watchdogs only bark when they are lured by the smell of filthy lucre.
Nationwide, China plans to build 10 million units of affordable housing this year, up 4.1 million from last year. The ambitious target requires a whopping 1.3 trillion yuan (US$201.8 billion) in funding. As many localities are now up to their necks in debts, where will all the money come from?
In case you're wondering, Qin Hong, deputy chief of the research center at the Ministry of Housing and Urban-Rural Development, told Half-Monthly Forum, a Xinhua-affiliated publication, early this year that a major source of funding for social housing is land sales.
Unchecked misuse
Many indebted local governments are kept afloat solely due to land sales. But this money-spinner is also sowing the seeds of corruption and social ills, evident in the scandal-ridden public housing sector.
Although the provision of affordable housing is a laudable cause, we should beware of those exploiting it as justification for more ruthless land sales to line their own pockets. Alas, so far there are no effective checks on officials' misuse of land revenues.
Hence the irony that the government is flirting with an adjustment of its addiction to so-called "land finances."
How wise is it to expect incorrigible junkies desperate for the next fix to administer their own drug rehab programs?
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