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Shantytown Renovation
Cover Stories Series 2012> Shantytown Renovation
UPDATED: August 6, 2012 NO. 32 AUGUST 9, 2012
Say Goodbye to Rickety Life
Liaoning completes renovations of its shantytowns
By Yin Pumin

"The number of reconstruction areas in Liaoning is almost twice the average number per year required by the UN Millennium Development Goals, which will be an immense achievement in any country or region," Wang said, adding that the "government guided market operation" mode explored during the shantytown renovation will provide a good model for other places and countries.

Facing the problem of a funding shortage, the Liaoning Provincial Government made a series of special policies to raise funds in various ways in a short time. The most creative one is the fund-raising mode of "government plus market plus society," which means under the guidance of the government, using market ways to attract social funds.

After years of market operation, many cities have realized the obvious increase in their fiscal revenues by transferring the land vacated from renovated shantytowns. In the six years from 2005 to 2011, the whole province obtained land of 134 square km by renovating shantytowns and raised 2.42 billion yuan ($384.13 million) in funds.

"The fund-raising mode activated the movement of funds between enterprises and public foundations, successfully proving the mode's historic and systematic meaning," said Banji Oyelaran-Oyeyinka, Director of the Global Monitoring and Research Division of UN-HABITAT who provided research for and helped formulate the CASS' assessment report in January-February.

In order to guarantee the efficient use of renovation funds, special accounts under close supervision were founded. The funds would be directly transferred from the city-level financial supervision departments to construction companies to reduce the chances of embezzlement. Meanwhile, to further strengthen the daily supervision to the renovation funds, an independent account system was adopted by audit and financial departments in managing the income and expenditure.

"Another significance of the Liaoning shantytown renovation is that it showcased some systematic innovation," said Banji. "The shantytown renovation project provides great opportunities for these cities to realize their economic structure transformation and to find new economic growth engines."

Meanwhile, the shantytown renovation project is an important part of the strategy of promoting all-round social development. With flexible policies and systematic innovation, the renovation project enabled former shanty residents to enjoy the same social services as other residents.

Currently, the three-level social security system has been established in districts, streets and communities, covering retirement pensions, unemployment insurance, medical insurance and subsistence allowances.

The last innovation is about property rights. After completion of shantytown renovation, the government adopted flexible forms to satisfy residents' different requirements to property rights. These forms include full property rights, partial property rights and limited property rights plus low rents.

"In all, the shantytown renovation in Liaoning put emphasis on cities' balanced development, which guarantees the combination of the current renovation and the future innovation of those cities," said Banji. "Liaoning's experience provides guidelines not only to other Chinese provinces but also to other countries in transforming shantytowns."

With the experience, the Chinese Government pledged to speed up the transformation of shantytowns in cities around the country in the coming years, according to the National Human Rights Action Plan of China (2012-15).

According to the Ministry of Finance, 6.5 billion yuan ($1.03 billion) has been allocated from the central budget to fund the country's shantytown renovation projects.

The money will be used to fund the government's shantytown renovation scheme, including the relocation of shantytown residents and construction of new houses and infrastructure facilities, the ministry said.

The amount has brought the Central Government's total investment to 27.7 billion yuan ($4.4 billion) this year in the scheme, which is expected to benefit 1.9 million urban households nationwide.

Email us at: yinpumin@bjreview.com

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