This paper examines the outcomes of the housing reform in China and the main challenges for public housing schemes. In the past 30+ years, the Chinese governments at various levels have introduced numerous housing reform measures and the meaning of public interventions in housing has shifted overtime. Despite of the improved urban housing conditions, until very recent, the role of public housing had been increasingly marginalised and urban housing inequality had increased dramatically. There has been a renewed interest in public housing provision from 2008. As far as housing with a public element goes, so far, the government intends to create a system in which public funds may reach different income groups and for different tenure types. The access to the funds or housing will be mean-tested. However, despite of these efforts, housing issues appear to be more at the centre of public attention these days. The paper tries to explore the main reasons behind this phenomenon.