China’s first ‘lobbyist’

For some people, retirement means more time for golf and grandchildren.

Not for Li Ming. For the last three years, he has been busier than ever, writing petitions and giving interviews to newspapers. The 61 year-old said he has been so busy he hasn’t had much time for his family at all.

Before he retired three years ago, Li was a senior economist at the Liaoning Provincial government’s Foreign Economy and Trade Department. But these days he is one of the country’s most outspoken critics on housing policy. His petition for China’s ‘Second Housing Reform’ has received high-profile coverage in mainland newspapers, transforming him into something of a celebrity.

The first housing reforms, which were passed back in 1998, opened up China’s property market to private ownership. Prior to that, most urban residents lived under the welfare housing system provided by the government or their work units.

A deregulated housing market led to soaring property prices. So in 2007, Beijing tried to modify its approach and introduced the so-called double-track system to ensure both commercial and low-cost housing was built.

But critics say that the government did not keep its promise to build more low-cost housing. The China Daily also points out that, by the end of August last year, only 23.6% of the central government’s budget for economically affordable housing and low-rent homes had been spent.

Meanwhile, urban home prices have continued to spiral upwards. The National Bureau of Statistics reports that urban property prices went up by 11.7% in March on a year earlier, the fastest pace in five years.

China’s leaders are clearly concerned. In last week’s Talking Point, we talked about the latest efforts being made to rein in much of the easy credit that has helped finance the hyper-surge in prices, including raising downpayments and interest rates for buyers of second and third homes. And new taxes on luxury developments are reportedly in the works.

Li, who is now called a “housing expert” by the local media, said he started paying attention to the housing market four years ago, when he noticed that property developments in his village near Dalian had gone from Rmb1,960 per square metre to Rmb4,000 seemingly overnight.

“If property prices are going up so quickly even in the countryside, how do ordinary people afford to buy houses in the cities?” Li wondered at the time.

He quickly went to work, collecting data about the country’s housing prices and income statistics.

He concluded that the country’s lack of affordable housing for urban middle-class families (a group defined by the Chinese Academy of Social Sciences as having an annual household income of $22,000 or more) has made owning a home “unreachable” for most Chinese.

The weakness of the first housing reforms, Li told 21CN Business Herald, was that they left out the middle-classes. So in his proposed Second Housing Reform, he called for the government to promote new kinds of developers interested in building affordable houses for middle-class families. Land prices and tax rates must be fixed at certain levels, and developers’ profit rates should be no more than 5%.

Then came the hard part: how to get attention? With no money or position in government, Li had no political clout. Still, for two months the retiree handwrote 20 to 30 petitions a day and sent them off to the authorities. He ended up spending the majority of his monthly Rmb3,800 pension on postage stamps.

After sending out over 1,000 petitions, Li had heard no response. “The people at the government probably threw it away,” Li told Global Entrepreneur, matter-of-factly. “But for people’s voices to be heard, it takes time, hard work and patience”

Li spent the next three years reading up on China’s housing policies, studying statistics and fine-tuning his proposals for reform. He pored over directories of the addresses of delegates of the National People’s Congress (NPC) and Chinese People’s Political Consultative Conference (CPPCC), hoping that one of them might bring up his proposal at the annual parliamentary meetings.

Li’s persistence caught the attention of Zhu Kaihui, a delegate at the NPC. After receiving a copy of his petition, she called Li at his home to tell him that she wanted to include it in her proposal to speed up legislation on housing reform.

Soon, the retired official received a letter from Zong Qinghou, chairman of leading mainland beverage maker Wahaha and a also member of the CPPCC. Zong also promised to include Li’s proposed housing reform in his proposal at the annual meeting of the CPPCC in March.

The fact that Zong – one of China’s most high-profile and succesful businessmen (see WiC29) – was ready to get behind housing reform grabbed headlines across the country. For the first time, Li said he felt a sense of achievement.

“Up to now, I thought there was little hope for this matter [housing reform]. But this is indeed a victory of the people,” says Li. “And no one will now call my proposal for housing reform utopia.”

Li has no plans to slow down. He said he will keep going until his reform is implemented. “On the issue of housing policy, the voice of ordinary people is still too weak,” says Li.

Li now has a reputation in the local media as ‘China’s first lobbyist’. Unlike in the US, it lacks negative connotations. In fact, for a society still grappling with the issue of how ordinary folk can steer policy debates, Li’s tactics could prove an inspiration to others.

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