Solution to Government Cash Crunch: Tap Public Housing Fund

As part of a reform package (draft rules) for public housing funds, local governments will be able to use public housing funds (invested by individual workers and their employer) to purchase local government bonds under a new plan.

iFeng: 新版住房公积金投资放宽 将可购买地方债
In addition, the provisions approved by the housing provident fund management committee, may apply in accordance with relevant regulations issued by the state housing fund individual housing loan-backed securities and housing fund can be used to purchase local government bonds, policy financial bonds, housing fund individual housing loan-backed securities high credit rating of fixed income products.

Update: Bloomberg recently covered China's forced savings in The Trouble With Saving 21 Trillion Yuan
Liang responds that one reason debt is so high is that so much money is being put, by the government and others, in bank deposits: The only way to get the trapped money out is to borrow. “The savings rate is crazy,” she says in a phone interview. “It’s not natural.”
Using public housing funds to buy local government bonds is exactly the wrong way to get the money out.

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