Event
In the first half of 2022 and the second half of 2021, many local governments, in an attempt to rescue their local housing markets, introduced policies stating that one must buy a house in the city in order to attend school there.
Reflection
This policy is quite alarming. Linking education with capital is as terrifying as tying healthcare or political power to capital.
The group that is most affected by this are the migrant workers. It forces them to use their limited savings to take on mortgages, indirectly aiding real estate companies and local governments. This also makes it even harder for rural areas to retain their population. From this perspective, was Chairman Mao's mass criticism of intellectuals and his strong promotion that science is of no use somewhat effective in a twisted way? The irony is palpable.
Prediction
China's urbanization rate has already surpassed 80%. If we exclude the population retained by large companies based in rural areas (since they are essentially urban but are counted as rural), there are hardly any individual farmers left (many former individual farmers have already become corporate employees). Continually pressuring them to move to cities will have the following direct consequences:
- Further increase in the urbanization rate.
- Limited room for housing price growth in third and fourth-tier cities.
- Social unrest, with third and fourth-tier cities being the first to rise up (for instance, why did the recent mass mortgage default originate in Jingdezhen and not in Beijing? Why wasn't the news suppressed?).