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Christopher Balding

Channeling Tom Selleck, China Tries Reverse Mortgages

With pensions in trouble, the government must get creative.



Photographer: Paul Yeung/Bloomberg

The China Banking and Insurance Regulatory Commission wants to help the elderly enjoy their golden years in comfort. With the world’s fastest-aging population and a pension system beset by shortfalls, China is turning to a staple of late-night television commercials — reverse mortgages — to help out retirees. It just might work.

Outside of Beijing and Shanghai, China’s real-estate market is nearly moribund after years of spiraling values drove home-ownership beyond the reach of many people. In the southern city of Shenzhen, which has an official population of 12.5 million and more than 4 million housing units, only 12,804 units changed hands in the first half of this year. To put that in perspective, it would take 163 years at this rate to sell off existing units. In the coastal city of Xiamen, with a population of more than 4 million, just 2,500 units were sold.