A top gripe in China is the inability to find affordable housing. The government is responding with one of the world’s largest subsidized-housing programs. For some in Chongqing, that means a free apartment.

Xiang Yuankun is a 26-year-old college graduate with a technical job at the iPad maker Hon Hai Precision Industry Co. In November, he moved into a brand-new, two-bedroom Chongqing apartment that has a living room, kitchen, bathroom and small patio.

His out-of-pocket rental charge: zero.

Chongqing is at the forefront of a vast experiment in socialized real estate, a policy to make the housing market more economical with subsidized living for new urbanites, including young workers like Mr. Xiang.

“There are still a large number of low income people who cannot afford housing. So I think it comes to the government to show its responsibility to provide them this housing,” says Chongqing Mayor Huang Qifan. The mayor said in an interview the city’s goal is to subsidize up to 40% of local housing stock. It’s a goal with a hefty price tag, one Chongqing says is worth it and is affordable.

Here’s how Mr. Xiang snagged a free apartment, which he describes as a “privilege.”

Last February, he was working at a Hon Hai factory in Chongqing and residing in a company dormitory when he noticed “a lot of publicity” about opportunities to live in cheap apartments located a short bus ride away.

Mr. Xiang applied online and within hours was entered into a lottery where the prize was a cheap rental apartment. Several of Mr. Xiang’s neighbors and residents of other subsidized apartment buildings in Chongqing told similar stories about how they won spots.

To prove his eligibility under the rules, Mr. Xiang uploaded personal information to a government website: proof of a college degree, an employment contract, income below 2,000 yuan per month, about $315, and a current residence outside the downtown under 13 square meters, about the size of a parking space.

On March 2, the lottery was broadcast on TV. Mr. Xiang missed the program but soon found out he had won by logging onto his computer.

“It’s bigger than my dormitory,” Mr. Xiang said when China Real Time caught up to him weeks after he moved into the apartment in early November. He had just taken delivery of a refrigerator and a small spin-dry machine for washing clothes. “The sofa, air conditioner, everything you buy yourself,” he said, while collapsing the cardboard that boxed the items.

There was no room to install the appliances in the narrow kitchen, which has a two-burner stove, a sink and a bit of counter-top.

The drier was sitting on the small outside terrace, 26 floors above a roadway and more apartment buildings. The refrigerator fit best in the living-dining room, opposite a purple sofa and a cramped glass table with four orange chairs.

In addition to his bed, Mr. Xiang’s own room had an upright wardrobe for clothes. His laptop was perched on a chair. He opened the door to the bedroom his roommate, a colleague, will take. “It’s a little bit small for two people,” he said, referring to the whole place.

The bathroom is tight, with a shower that drains into the squat toilet. Residents who want warm showers can buy electric heaters peddled from the trunks of cars outside the complex’s front gate.

Rosealea Yao, principal analyst at Beijing’s GaveKal Dragonomics, concluded in a recent study of Chongqing’s subsidized housing sector that the small size of some apartments suggests they will especially appeal to business owners as incentives to put factories nearby, since workers can live economically. “The design of rental housing also makes them more like dormitories for individual workers than permanent housing for urban families,” Ms. Yao wrote.

Size isn’t the only compromise with Mr. Xiang’s new place. His neighborhood, though expanding massively with more than 55 buildings topping 30 floors, was carved out of farm fields and still has only rudimentary residential infrastructure. The food market is little more than a covered lane.

While not far from his factory, the neighborhood is set more than 40 kilometers from Chongqing’s congested downtown. It is a new zone for universities and high-tech companies that is well over an hour’s drive from the city center on a highway that passes through two tunnels and that crosses a large bridge. The subway won’t link to the area until 2013.

Now, the free part.

The 58-square-meter apartment itself rents for about 535 yuan monthly, or $85. Mr. Xiang is splitting that with his Hon Hai colleague.

And Mr. Xiang says his own employment package includes up to 400 yuan per month in rental reimbursement.

That works out to zero rental cost.

Mr. Xiang says his girlfriend and parents are pleased. He has an option to buy the apartment after five years.

“Frankly,” Mr. Xiang says, ”what choice does a normal worker like me have?”

–James T. Areddy; follow him on Twitter @jamestareddy

Reforms started in the late 1970s with the phasing out of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, the foundation of a diversified banking system, the development of stock markets, the rapid growth of the non-state sector, and the opening to foreign trade and investment.

The Chinese government seeks to add energy production capacity from sources other than coal and oil, and is focusing on nuclear and other alternative energy development.

The People’s Republic of China is the world’s second largest economy after the United States by both nominal GDP ($5 trillion in 2009) and by purchasing power parity ($8.77 trillion in 2009).

Available energy is insufficient to run at fully installed industrial capacity, and the transport system is inadequate to move sufficient quantities of such critical items as coal.

The two sectors have differed in many respects.

The technological level and quality standards of its industry as a whole are still fairly low, notwithstanding a marked change since 2000, spurred in part by foreign investment.

By the early 1990s these subsidies began to be eliminated, in large part due to China’s admission into the World Trade Organization (WTO) in 2001, which carried with it requirements for further economic liberalization and deregulation.

Globally, foreign investment decreased by almost 40 percent last year amid the financial downturn and is expected to show only marginal growth this year.

From January to June, the ODI in financial sectors was up by 44 percent to $17.9 billion, and in July alone, the ODI recorded $8.91 billion, the highest this year.

China is expected to have 200 million cars on the road by 2020, increasing pressure on energy security and the environment, government officials said yesterday.

Although China is still a developing country with a relatively low per capita income, it has experienced tremendous economic growth since the late 1970s.

Agriculture is by far the leading occupation, involving over 50% of the population, although extensive rough, high terrain and large arid areas – especially in the west and north – limit cultivation to only about 10% of the land surface.

In terms of cash crops, China ranks first in cotton and tobacco and is an important producer of oilseeds, silk, tea, ramie, jute, hemp, sugarcane, and sugar beets.

Livestock raising on a large scale is confined to the border regions and provinces in the north and west; it is mainly of the nomadic pastoral type.

Coal is the most abundant mineral (China ranks first in coal production); high-quality, easily mined coal is found throughout the country, but especially in the north and northeast.

China is among the world’s four top producers of antimony, magnesium, tin, tungsten, and zinc, and ranks second (after the United States) in the production of salt, sixth in gold, and eighth in lead ore.

Coal is the single most important energy source in China; coal-fired thermal electric generators provide over 70% of the country’s electric power.

After the 1960s, the emphasis was on regional self-sufficiency, and many factories sprang up in rural areas.

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Home Economics: Free Apartment in Chongqing