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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.
China is increasingly pondering tough questions as it looks to a graying future. Right now, China's 215 million elderly people account for 15 percent of the total population. By 2050, that number is expected to rise to 350 million — nearly one-quarter of the population.
That has China scrambling to find a more sustainable pension system for its people. In the 1990s, the government dismantled the cradle-to-grave welfare system and borrowed money from younger workers to pay older ones. The country's pension fund will be $116 trillion in the red by 2050, according to the Chinese Academy of Social Sciences, a top government think tank.
Enter Mr. Meng.
The apparatchik turned businessman, who now runs a Chinese private equity firm, argues that it is not practical for retirees to live on slow-growing pension benefits while home prices have soared over the past two decades.
"Under these circumstances, participating in the house-for-pension plan can be regarded as an important option for China's elderly to improve their living conditions and live better in their later years," he said.
"If the elderly in China had a lot of insurance or a high savings rate like in Japan, then they don't have to participate in the house-for-pension plan," Mr. Meng added. "But they don't have either."
Reverse mortgages invite skepticism in America, too. But in China they defy traditional attitudes about family.
Yu Yue, a 61-year-old widow and former factory worker in Beijing, is considering the plan. She scrapes by on $434 a month in pension payments, and her son gives her the same amount monthly.
"I would like to give my apartment to my child," Ms. Yu said. "But I'm helpless. I need some form of safety net."
Insurance companies say they were worried about the prospect of a real estate crash as well as longer life expectancy in China. China also lacks the fundamental legal framework to govern the program, said Hu Jiye, a professor who studies pension finance at the China University of Political Science and Law.
"Mr. Meng Xiaosu is the proponent of the house-for-pension plan, and as such, he's willing to go ahead with it even if it's a money-losing venture," he said. "But the cultural environment doesn't support it. Neither does the legal environment."
Mr. Meng dismissed concerns about legal issues. Regarding insurance industry worries about a housing slump, he said, "I told them: 'Stop asking me this brainless question. It doesn't exist. It has never fallen even in a year. How can it be a bubble?'"
Mr. Meng helped create the program, which is offered in Beijing, Shanghai and two other Chinese cities. As of the end of October, only 89 people had participated, according to Happy Life Insurance, an insurer founded by Mr. Meng in part to offer the policy — and, currently, only one of two insurers offering it.
But the Chinese government said in July that it would extend the pilot plan to dozens of cities — Mr. Meng estimated 60 — over the next two years, and the People's Insurance Company (Group) of China, a major insurer, said it had started offering the plan in October.
Mr. Meng, 67, never graduated from high school, coming of age amid the turmoil of the Cultural Revolution, and became a Red Guard, writing up posters denouncing people who were deemed political enemies. "I never beat anyone," he said.
In 1978, he enrolled in the prestigious Peking University, among the first group of students who passed the first higher education entrance exams held after the Cultural Revolution. He was 28. Premier Li Keqiang was his classmate.
Mr. Meng eventually became the aide to Wan Li, the former vice premier of China and the pioneer of agricultural reforms.
He went on to become president of the China National Real Estate Development Group Corporation, the country's largest state-owned property developer, formulating many policies that earned him the title of "godfather of real estate."
In Mr. Meng's office are dozens of framed photographs of him with other senior Chinese politicians as well as Bill Clinton, whom he calls a "close friend." ("At first, I thought about sending Hillary a note but didn't," he said the day after the presidential election. "In the end I thought, since a real estate magnate is president, we will have a bigger say. Will the U.S. real estate mogul turned president be willing to speak with China's godfather of real estate?")
In 1995, Mr. Meng traveled to the United States as a visiting scholar to study economics and real estate for six months at the Massachusetts Institute of Technology; the University of California, Berkeley; and Indiana University. That experience had a profound impact on Mr. Meng — and ultimately, China's middle class. It led him to believe that the Chinese people could have their version of the American dream — "one house, one car," as he put it.
Once home, he persuaded skeptical banks that Chinese people would pay back their mortgages. That helped introduce a housing market in which prices are controlled by the market, not the government, leading to the price appreciation that has enriched millions of Chinese households.
"All these products that I introduced were from abroad, especially from the United States," he said.
As home prices in China soared, Mr. Meng began studying the reverse mortgage systems in countries such as the Netherlands and the United States. In 2003, he wrote a letter to his former colleague Wen Jiabao, who had just become premier of China, telling him that Chinese retirees "will be able to live comfortably" with the house-for-pension plan.
That year, Beijing approved the pilot program, stoking widespread controversy. Several people blamed the government for shirking its responsibility in providing for their old age. Under the plan, if the borrower's children are not willing to buy the property, it will be sold in an auction. The insurance company would deduct the capital and interest payments, and any leftover money would be given to the borrower's children.
Mr. Meng said he would join the plan when he formally retired. His 31-year-old son approves of it, according to Mr. Meng. "I'm in no rush now," he said. "When I enroll, I want to create an impact and make the elderly feel at ease."
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