China has introduced its inaugural national urban renewal strategy, projecting a minimum investment of CNY15 trillion (approximately USD2.2 trillion) over the next five years, according to a research report from Huachuang Securities.
On May 28, the State Council unveiled the urban renewal plan as part of the 15th Five-Year Plan, which extends through 2030. The strategy aims to upgrade 500,000 deteriorated and unsafe housing units, revamp 115,000 old residential communities, overhaul 1,500 outmoded commercial and industrial districts, and restore 4,000 urban villages.
Under this new framework, annual investment in urban renewal projects is expected to reach around CNY3 trillion (about USD443.3 billion) from 2026 to 2030, according to Huachuang’s report issued the following day. For comparison, China allocated CNY2.6 trillion and CNY2.9 trillion in 2023 and 2024, respectively, to approximately 60,000 projects each year, as previously stated by the housing authorities.
The government will conduct thorough assessments of neighborhoods built over two decades ago, evaluate their current conditions, set renovation objectives, and address infrastructural deficiencies—such as installing elevators in qualifying buildings.
The strategy emphasizes establishing a sustainable funding system that combines government funds, financial institutions, and private capital to meet the significant financing demands of these projects. Each source of funding will play a distinct role, explained Tang Daizhong, deputy director of the construction management and real estate department at Tongji University. Government funds will serve as the foundational capital and safety net, financial institutions will leverage additional financing capacity, and private capital will support the ongoing operation and maintenance of the projects.
Local authorities will be authorized to issue special bonds for eligible projects and to promote asset-backed securities issuance, including real estate investment trusts (REITs), for specific initiatives.
In addition, China plans to develop and upgrade roughly 770,000 kilometers of underground infrastructure in urban areas over the next five years, with a total investment of CNY5 trillion. This infrastructure includes about 200,000 km of gas pipelines, 175,000 km of drainage and water supply networks, 100,000 km of wastewater pipelines, and 120,000 km of heating pipelines.
During the implementation of the 15th Five-Year Plan, the investment multiplier for constructing and upgrading pipeline networks is expected to range from 1.5 to 2 times, significantly higher than typical infrastructure projects, noted Lv Hongliang, senior engineer at the China Academy of Urban Planning and Design.