He is known in China as the “godfather of real estate,” helping lay the groundwork for private homeownership in China, a move that enriched millions and laid the foundations for a vibrant and thriving Chinese middle class.
Now, Meng Xiaosu wants a lot of Chinese — the older ones, specifically — to cash out.
Older people need to mortgage their homes to address China’s looming demographic bust, Mr. Meng argues. Because of China’s now-defunct one-child policy and other social trends, the country has a rapidly graying population that someday soon may become too expensive for the Chinese government to support.
Mr. Meng’s proposed solution is to bring reverse mortgages to China. Called a house-for-pension plan in China, a reverse mortgage allows homeowners to tap the equity in their homes by taking out loans against it.
His argument faces deep business and cultural opposition — mortgaging homes is a tough sell in a country where parents traditionally passed them on to their children — and only a few dozen people in all the country have signed up so far. But he argues that China may have little choice.
“China’s elderly do not have much money,” said Mr. Meng, who drew much of his inspiration about the Chinese property market from a stint studying in America, “but they have valuable homes.
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