Why would Chinese college students start paying the Housing Fund?

Speakers: Heyang, Ryan Price, and Niu Honglin

[Photo: Baidu.com]

Five cities in China announced that the local governments will encourage college students to start paying the Housing Fund before they have a job. These five cities include Wuhan (Hubei province), Chengdu (Sichuan province), Changsha (Hunan province), Hefei (Anhui province) and Nanchang (Jiangxi province).  

The Housing Fund, also Known as the Housing Provident Fund, established in 1999 for helping Chinese employees save money on monthly basis in order to buy their own properties in the future. 

The Regulations on the Administration of Housing Funds stipulates that contribution rates from employers and employees are regulated by the local government. However, it should not be lower than 5% of the average wage in the company. In Beijing, for example, employers contribute 12% of the average wage calculated from the previous year and employees contribute 12 percent of their salary.

Why do these five cities encourage college students, who do not have stable income, to pay the Housing Fund at such an early stage? Wuhan Public housing Fund Management Center expressed that the government attempts to ease the students’pressure for buying or renting a property after their graduation. 

Listen to the show and find out if this initiative helps ease the pressure, or does it increase burden for parents? 

The audio clip is from Round Table, produced by CRI.