China has a unique experience of public housing development. Before 1998, public ownership dominated the housing provision in urban China. Nonetheless, the employer-based welfare housing program was formally abolished in 1998, and the overwhelming majority of the public housing stock was quickly privatized. However, the Chinese government again committed to developing public housing in 2007, and a large-scale public housing construction program has been implemented since 2009. This chapter aims to first provide a summary of pre-reform and post-reform public housing development in China and then discuss why the Chinese government has again turned to public housing as a solution after about 30 years of housing reform and privatization. It shows that the recent push for public housing in China should not be seen as a step backward or as the restoration of the pre-reform welfare housing system. Instead, it represents the central authority’s increasing recognition of the complexity of urban housing systems in a modern market economy.

China has a unique experience in public housing development. Before 1978, the provision of housing in China rested on strong socialist ideologies: housing was not regarded as a commodity with an exchange value but instead as a basic need, as a right, to be allocated outside of the marketplace (Angel 2000). Since 1978, old-style public housing has been privatized and the socialist welfare housing system phased out. The housing conditions of urban residents have greatly improved since the market-oriented housing reform: the floor area per capita increased from 6.7 square meters in 1978 to 32.7 square meters in 2011, and the homeownership rate reached 89.3 % in 2011 (NBSC 2011). However, the supply of affordable housing has not kept pace with the full-fledged marketization. In recent years, the rapidly rising housing prices and lack of affordable housing for low-and middle-income urban households, particularly in big cities, have triggered widespread complaints from many would-be home buyers (Chen et al. 2010; Logan et al. 2010), thus also threatening the socio-economic and political stability (Naughton 2010).