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449 80 A Conversation with C. Y. Leung March 14, 1990 ZRJ: At present, the domestic market in China is depressed. For the sake of the immediate interests of the people of Shanghai, I’m thinking of initiating three measures in its markets: —1. Further developing the “vegetable basket” project so as to gradually modernize the production of non-staples, retail them in supermarkets, and integrate their production with marketing. —2. Doing good urban infrastructure planning and construction centered on road transport, so as to drive the development of other industries. —3. Reforming housing policy and expanding the construction market. One problem that Shanghai’s people urgently need a solution for is that of housing. A great number of young and middle-aged teachers and sci-tech workers are leaving, and difficulty finding housing is one of the reasons. For the people of Shanghai, food isn’t much of an issue, but their housing is too cramped, with an entire family crowded into one small dwelling. If we were to rely solely on investments from the state for housing construction, I think Shanghai’s housing difficulties wouldn’t be solved in a span of 30 or even 50 years. Enterprises are also going through hard times and cannot come up with more money to build housing. We could borrow from the methods Hong Kong and Singapore used to solve their housing problems: namely, to have the state, enterprises, and individuals all pitch in. Individuals could also pay something for building and buying homes in installments, the way they pay for color TVs. Withdraw short-term credit and turn it into long-term investment in residences. Shanghai has the conditions for doing so; the key is to improve performance at every step of the housing construction process and lower costs. Moreover, in terms of China’s population as a whole, the caliber, capabilities, and technical and cultural levels of Shanghai’s people are quite high. Provided there is good leadership and a tight focus on the work, they can do anything successfully. With such a powerful weapon in hand, provided our housing policy wins the support of the people, we can start up a construction market and accelerate housing construction. At the same time, we can integrate this with the development of Pudong, use new land policies to attract foreign investment, Zhu_Shanghai Years_1987-1991_hc_9780815731399_i-xii_1-620.indd 449 12/26/17 12:01 PM 450 A Conversation with C. Y. Leung and use differential land rates to encourage the industries and populace in the old urban areas to disperse to Pudong. I’d therefore like to ask you about the financing methods used in Hong Kong to solve its housing problems. First, let me ask [Vice Mayor Ni] Tianzeng to say a few additional words. NTZ: Originally, the state was responsible for most of the housing construction in Shanghai, and housing was allocated. Over the past few years, enterprises gradually assumed responsibility for some of the construction, but basically no individuals did so. The original idea for housing reform was to rely mainly on individuals, but given the current circumstances, it seems that it would be difficult to completely rely on individuals to solve the housing problem—we have to rely on the state, enterprises, and individuals all pitching in. At the same time, we have to reform the present method of allocating housing, which is very difficult to manage at the moment—some housing takes less than a year to build, but it might take one to two years for it to be allocated. In addition, it’s very difficult to raise the money needed for housing construction, while it’s impossible to rely completely on investment from the state. That’s why, Mr. Leung, we’d very much like to hear your thoughts on how to get the state, enterprises, and individuals to pitch in together, how to start a virtuous cycle for the circulation of construction funds, and how to further improve investment performance. CYL: Mayor Zhu, you’ve given me a very big topic to cover. I can only make small comments on a big topic and discuss a few personal views, starting with the question of the real estate market. In real estate elsewhere, the increase in buildings follows a definite pattern—there is basically a positive correlation with the local economic growth rate. That is the case in South Korea and Singapore , and it is also the case in Hong Kong and Taiwan. Even though...


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