Economy

System allows wealthy to sponge off subsidies

By Jin Zhu (China Daily)
Updated: 2010-06-24 10:30

Luxury cars, including BMWs and Mercedes-Benzes, sit in an underground car garage of a residential building in Shenzhen, Guangdong province, in this March photo. The apartments in the government-invested building are earmarked for low and medium wage earners. Shenzhen Evening News file photo

Loopholes need to be tightened to ensure needy receive benefits

Beijing - As many as 330 million yuan ($48.5 million) in government subsidies were used by 62,900 families too rich to qualify last year, the country's auditor general said on Wednesday.

Liu Jiayi, head of the China National Audit Office (CNAO), made the statement in an annual audit report submitted to the 15th session of the Standing Committee of the 11th National People's Congress (NPC), China's top legislature.

Of the 62,900 unqualified households who received subsistence subsidies, 11,900 were found to own private enterprises, cars or at least two real estate properties, Liu said.

It was also found that nine cities, which Liu did not identify, gave 869,000 yuan worth of low-rent housing subsidies and 74 apartments to 705 unqualified families.

The use of subsidies by those too wealthy to legally qualify has been the result of the absence of well-functioning systems for examining applicants' qualifications and supervising recipients. There are no sound methods in place to gather accurate information about hopeful or actual recipients' incomes and properties, Liu said.

The government has significantly increased the supply of subsidized land, low-rent housing and economically affordable homes in recent years to improve supply-and-demand imbalances, especially in cities with exceptionally high housing prices.

Some low-rent and affordable houses went to wealthy families, some of whom even owned luxury cars such as Mercedes-Benzes and BMWs, media reported.

"It is difficult to know how many houses a person actually owns because there is no online platform requiring people to register their information when purchasing a home," Li Wenjie, general manager of property agency Centaline China's North China Region, said.

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"No consensus has yet been reached on whether or not people should make their property ownership information public, so the government has not forced them to do so."

A random survey of 448 low-rent housing programs and 10 shantytown renovation projects in 19 provinces and municipalities found only about 42 percent of the investment needed to carry out the projects had been made by the end of 2009.

"Some local governments drag their feet when building low-rent housing because it doesn't generate income but it does cost land," Li said.

Li said the central government should strengthen supervision of such projects, because many local governments focus solely on economic development.