NBD Hot Review | Let Over 10 Trillion Yuan in Provident Funds "Wake Up" Quickly and Become "Timely Spring Rain" Benefiting People's Livelihoods

Everyday Economic Commentator Chen Mengyu

In recent days, calls for reform of the housing provident fund system have been growing louder. First, after a decade, the reform has once again been included in the government work report, which emphasizes “lowering the interest rate on individual housing provident fund loans.” Second, the relaxation of purchase restrictions over the past two years—such as support for multi-child families buying homes and increased loan quotas at the local level—has reached a critical juncture.

The 2015 government work report stated: “Continue to promote reforms in science and technology, education, culture, healthcare, pension insurance, public institutions, and the housing provident fund.” At that time, the real estate market was still in a key stage of destocking, and the main role of the provident fund was to assist residents in purchasing homes and absorb existing market inventory. This year’s government work report specifically highlights reforms to the housing provident fund system, indicating the topic has become even more important.

Currently, the real estate market has shifted from strong demand to a structural oversupply, while residents’ demand for improved living quality is increasingly urgent. This presents new requirements for the provident fund system.

As can be seen, since last year, the provident fund has been a frequently mentioned term in the optimization of local real estate regulation policies. According to China Index Academy, over 630 real estate policies were introduced nationwide in 2025, with about 280 related to the optimization of provident fund loan policies—the highest among all policy types. Since February this year, cities like Shanghai, Xiamen, and Tianjin have implemented new provident fund policies.

Previously, withdrawals from the provident fund generally required meeting specific conditions such as buying a home, renting, or retirement. Now, the fund can be used for down payments, paying property management fees, or installing elevators in old buildings. The introduction of these policies is a positive exploration of reforming the provident fund system and sends a strong signal: the provident fund is shifting from a single tool for supporting home purchases to a comprehensive social security tool covering all housing scenarios. As the real estate industry enters a new stage, it is time for the provident fund system to respond to this demand.

In January this year, the People’s Daily Commentator Department mentioned in an article titled “What Signal Does the Central’s ‘Naming’ of the Housing Provident Fund Send?” that in 2016, the nationwide provident fund deposit balance was 4.56 trillion yuan; by the end of 2024, it had risen to 10.9 trillion yuan—more than doubling. With such a large amount of money sitting idle, there is room for improvement in efficiency, making reform truly necessary.

From an internal logic perspective, whether it’s the recent focus on housing security for first-time married and newly parented families or support for multi-child families purchasing homes, these are part of a unified “combination punch” aimed at precisely meeting reasonable housing needs, reducing family living costs, and stabilizing the real estate market. These efforts are deeply aligned with the long-term national strategies of encouraging childbirth and safeguarding livelihoods. The reform of the provident fund system is the most important financial support within this framework.

If the over 10 trillion yuan of dormant funds can be activated, the provident fund will no longer be just a loan tool. It could play a greater role in supporting cross-region recognition and lending, lowering the threshold for “commercial to public” transfers, and expanding coverage to flexible employment groups. This way, the funds could not only boost the housing market but also better benefit people’s livelihoods.

From stabilizing the market to institutional reform, from risk prevention to building “good housing,” the path for high-quality real estate development by 2026 is already clear. Against this backdrop, we look forward to the rapid implementation of provident fund reforms, so that the over 10 trillion yuan of funds can “awaken” quickly and become a “timely rain” that benefits people’s livelihoods.

Daily Economic News