It is said that China's housing fund is modeled on Singapore's example. Despite such claims, there are several major points of departure in the two management systems。
Singapore's housing fund is actually an offshoot of its pension fund, which maintains its value by wrapping itself in mortgages that can help prospective buyers pay for housing。
In China though, the country's pension and housing provident funds are run separately. Over recent years, this social service mechanism has drawn criticism for its inability to keep pace with rising home prices. Ironically, many of the people who now benefit most from provident fund loans are those who are already well-off financially. Meanwhile, the fund doesn't go far enough to help the low-income earners who are most in need of government funding support。
Housing fund contributions could perhaps be given out in lump sums at retirement, but this would have to be managed very carefully to avoid mismanagement。
The author is Tang Jun, a research fellow with the Chinese Academy of Social Sciences。
