The Restructuring of Housing Finance System in China(1) Housing Provident Fund(HPF): participating employees contribute a certain proportion of their salaries to their hpf accounts and employers contribute an equal amount. The compulsory minimum contribution rate in Shanghai is 7%. the savings at hpf can on y for housing-related purposes The functions of HPF: HPF initially was designed to finance housing production now it mainly issues personal home mortgage at a preferential interest rate o Problems with HPF: there may be an economic redistribution from the low-to high-income households China Urban Land and Housing in the 21st Century, HK Dec 2007China Urban Land and Housing in the 21st Century, HK Dec.2007 7 The Restructuring of Housing Finance System in China (1) ◆Housing Provident Fund (HPF): participating employees contribute a certain proportion of their salaries to their HPF accounts and employers contribute an equal amount. The compulsory minimum contribution rate in Shanghai is 7%. The savings at HPF can only for housing-related purposes. ◆The functions of HPF: HPF initially was designed to finance housing production now it mainly issues personal home mortgage at a preferential interest rate . ◆Problems with HPF: there may be an economic redistribution from the low- to high-income households