Paper short abstract:

This paper looks at the role of the financialization of homeownership and its effects on the urban working-class in China. Looking at the mechanisms of social protection in terms of housing shows that mortgages and debt are affecting workers differently according to their employment conditions.

Paper long abstract:

The Reform and Opening policies since the late 1970s have in major ways changed social protection and welfare in China. While urban workers used to enjoy ‘cradle-to-grave’ welfare, with the end of the urban work unit system workers’ privileged position to social protection has been marketized and privatized. Nevertheless, the reform of the welfare system, such as housing and pensions, continues to support the urban working-class, while rural migrants coming to the cities to work have faced marginalization and a lack of rights. Drawing on 20 months of ethnographic fieldwork in a Chinese steel town, in this paper, I look at how increasing financialization of social protection has deepened working-class fragmentations, not only along the urban-rural divide, but also within the urban working-class.

The establishment of the housing market and its financial insurance mechanisms such as the Housing Provident Fund on the one hand the marketisation has made a large part of the working-class homeowners. Thus, alongside rising housing prices their assets have gained significant value. On the other hand, incomplete access to these Housing Provident Funds available through formal employment contracts, as well as families’ differing abilities for intergenerational wealth transfer, affect younger workers’ chances to buy an apartment. Workers employed in the informal economy take on mortgages under precarious conditions. Mortgages of 25-30 years put them under enormous pressures for a significant part of their lives, including marriage and having a family. Financialization of housing therefore affects the working-class in uneven ways, leading to emerging class fragmentations.