OREANDA-NEWS. July 10, 2013. On the western foot of Changbai Mountain in Jiaohe City, Jilin Province, local citizen Tong Yongchun moved out of the shantytown that he called home for many years into the newly constructed Yongxiang Neighborhood. Tong Yongchun recalled the move with deep, emotional sighs.

"During the summer months in the shantytown, the rain would fall so hard that it would overflow everywhere, and in the winter every wall would be covered in frost; even using the bathroom was extremely inconvenient. Now, our house is new, bright, and spacious; there is grass and exercise equipment, and warmth is provided during the winter months. It is as different from our old house as night is to day."

Reforming the old industrial areas in places like Jilin province has been the constant objective for all levels of government, but the lack of available funds has historically bottlenecked improvement of shantytowns like this one. As the primary, long-term investment force in China, the China Development Bank decided to step in at exactly the right time and share the government’s burden; by innovating new financing models, CBD was first in the banking industry to support projects that turned shantytowns into affordable housing.

As explained by CDB Chairman Hu Huaibang, the improvement of shantytown areas not only protect and improve the livelihood of people and provide a needed requirement for a harmonious, stable society, but also assists in maintaining healthy and sustainable economic growth, thus making these projects an effective tool in upgrading China's economic development model. During the last few years, the China Development Bank has constantly been expanding the scope of its support for affordable housing projects, and in the future will expand this support to five major areas, namely low-rent housing, affordable housing, cost-limit housing, public rental housing, and the improvement of shantytowns. In both 2011 and 2012, CBD expanded affordable housing project loans by 100 billion RMB.

Shantytown improvement is much more complex than merely tearing down an area and rebuilding it. There is very little business value in shantytown improvement, which makes it difficult to attract the capitol necessary to conduct shantytown improvement projects. Starting in 2005 with a shantytown improvement project in Liaoning province, CBD manifested a spirit of "strengthening national power and improving the livelihood of the people" by actively utilizing developmental financing, strengthening cooperation with the Ministry of Housing and local governments, insisting on planning ahead, effectively combining financing and finance knowledge, and constantly improving its methods. This led to the creation of a "government-led, market-operated, and finance-supported" business model that allowed success for the people, the government, and for the bank.

By the end of May 2013, CBD has released a total of 511.6 billion RMB in affordable housing loans, which led to the construction of 360 million square meters of housing. This benefited 6.88 million households and 21.61 million low-to-medium income people. Shantytown improvement loans from CBD accounted for 332.4 billion RMB, or half of the bank loans provided for these projects, making the China Development Bank the primary force in affordable housing projects.
The next step for the CBD will be to conscientiously implement the policies of the CCP Central Committee and State Counsel, continue to strengthen cooperation with the Ministry of Housing and all associated committees, play a leading role in the finance industry, further strengthen the support of shantytown improvement projects and other affordable housing projects, constantly improve financing models, and strive to effectively provide finance services.