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Benefiting 22 Million Low-Income People -- How the "Major Bank in Shantytown Revamping" Was Born

In Jiaohe City at the western foot of Changbai Mountain in Jilin, resident Tong Yongchun recently moved out of the shantytown where he had lived for many years and moved to the new Yongxiang Residential Community. Speaking of the move, Tong said with emotions: "Before, in the shantytown, rains would come down through the roof in summer and snow would be on the walls in winter, and it wasn¡¯t convenient to even go to the toilet. But now we have a new and right house with green fields and fitness equipment, and in winter we have community heating. This is a world apart from how it used to be." In Jilin, there are millions of people like Tong who have benefited from shantytown revamping, and all this could not have happened without vigorous support from China Development Bank (CDB).

Support for shantytown revamping started from Liaoning

In Liaoning, Jilin and other old industrial bases, shantytowns used to be a dreadful topic. These makeshift shelters, usually located at urban fringes, mine and factory areas, and even coal mining subsidence areas, often lack drainage, heating, gas and other facilities, and drinking, toileting, and walking problems are widespread. The persistence of shantytowns has made it difficult for their residents to share the fruits of economic development and has also hindered the harmonious development of cities and even the Chinese economy.

Fushun City in Liaoning was once known as the "Coal Capital". The large scale of the shantytowns near the coal mines that had also existed for nearly 100 years was also rarely seen nationwide. Due to funding constraints, shantytown revamping in Fushun only completed over 700,000 square meters during the 18 years from 1987 to 2005. At that speed, it would take a century to revamp the shantytowns. In the entire Liaoning, as of the end of 2004, conjoined urban shantytowns with areas of over 50,000 square meters totaled 8.48 million square meters, and the gap in funding was as much as 18.7 billion yuan.

Starting in 2005, the new Liaoning provincial leadership, determined to tackle the difficult problem of shantytown, decided to accord shantytown revamping the priority status of the province's "Project No.1". In March 2005, CDB, offering timely assistance, issued its first loan of 3 billion yuan to Liaoning's shantytown revamping project, giving it the start-up funds, and unveiled CDB' support for welfare housing projects including shantytown revamping. As of the end of June 2013, CDB has issued cumulative loans of 17.4 billion yuan to Liaoning's shantytown revamping project, renovated nearly 32 million square meters of shantytowns, and improved the living conditions for 720,000 households and 2.14 million shantytown residents.

Starting from the old industrial bases in northeastern China, CDB's support for welfare housing projects including shantytown revamping began to spread across China, quickly taking root nationwide.

In Qingdao, Shandong, CDB provided financing of 2 billion yuan for the revamping project in the Yunnan Road area, with over 3,600 households of first-batch beneficiaries. For this reason CDB has been called the "bank that makes ordinary people happy" by local residents.

In Huangshi, Hubei, CDB began to cooperate with the Huangshi city government in 2011 in providing financing of nearly 10 billion yuan. From the feasibility study to project planning and design, from construction to employment and entrepreneurship of shantytown residents after relocation, CDB offered Huangshi a systematic financing plan, financial advising, and other package designs and development plans, creating the "Huangshi Model" in financial support for welfare housing projects.

In Baotou, Inner Mongolia, CDB issued loans of 63 million yuan in 2013 to support shantytown revamping in Baiyun District and associated construction, meeting the housing needs of nearly 500 low-income miner households in China's famous Bayan Obo rare earth ore mining area.

Accounting for half of welfare housing loans

In recent years, CDB has continually expanded the scope of its support for welfare housing projects to low-income housing, affordable housing, low-cost housing public housing, and shantytown revamping. During 2010-2012, CDB's annual increment in related welfare housing lending amounted to 100 billion yuan.

There is a strong policy nature to welfare housing projects, so market funds often find it difficult to enter that sector. CDB has actively given play to its development financing advantages and developed a new model of supporting welfare housing projects. First, CDB adheres to planning ahead and cooperating with relevant government ministries and local governments in pushing forward welfare housing construction. In 2011, CDB signed a cooperation agreement with the Ministry of Housing and Urban-Rural Development to establish the basic model of "planning ahead, government-led, and market operations" for welfare housing projects. Second, CDB integrates financing with talent gathering and strengthens system and mechanism building. In Huangshi, Hubei, and Changzhou, Jiangsu, CDB has carried out trial housing support system building to push forward the establishment of a housing support system that is assured in quality and fair and just in allocation and exit. Third, CDB innovates financing model, gives play to its comprehensive financial service advantages, and assists local governments to solve the difficulties regarding welfare housing financing in a multi-pronged way. In addition, CDB has enhanced methods and systems to manage credit risks, strengthen the management of funds utilization, and ensure correct funds utilization and effective compliance.

As of the end of June 2013, CDB has issued cumulative loans of 530.1 billion yuan to welfare housing projects with a total construction area of about 370 million square meters, benefiting 7 million households and 22 million lower-income people. With a 50% market share in lending to this sector and total 342.3 billion yuan in loans to shantytown revamping projects, CDB has become a major bank in supporting welfare housing projects. In December 2011, the Finance Institute of the Chinese Academy of Social Sciences and other units released the "Gold Medallists" of Chinese financial institutions, and CDB was named the year's "Bank with Best Contributions to Welfare Housing Construction".

CDB Chairman Hu Huaibang said CDB will next conscientiously implement the decisions and arrangements made by the CPC Central Committee and the State Council, continue to strengthen its cooperation with the Ministry of Housing and Urban-Rural Development and other government ministries, give play to the leading role of financing, further increase its support for shantytown revamping and other welfare housing projects, continually optimize the financing support model, and steadily provide financial services in order to let more people achieve their "dream for a home" and promote harmonious social building. (Kai Xuan)

[Source]£ºPeople's Daily
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