Urban renewal is a key focus of goverOn October 8, 2024, the State Council Information Office held a press conference to introduce the implementation of a package of incremental policies in the system. Among them, there is a significant demand for incremental funding in the field of urban renewal. So what specific support policies are there, and is there any financing support?nment investment support?
There is a clear direction for the renovation of underground pipeline networks in China
“At present, China’s urban development has entered a stage of equal emphasis on incremental construction and stock renewal. It can be said that in the coming period, the task of urban transformation and renewal will become increasingly heavy. ” Liu Sushe, Deputy Director of the National Development and Reform Commission, said that taking the construction and renovation of the underground pipeline network of the important “neighborhood project ” in cities as an example, it is expected that the total amount of urban gas, water supply and drainage, heating and other pipeline networks that need to be renovated in the next five years will be nearly 600,000 kilometers, with a total investment demand of about 4 trillion yuan.
Liu Sushe, Deputy Director of the National Development and Reform Commission.
Strengthen the key construction of urban renewal and form new economic growth points.
Liu Sushe pointed out that the package of incremental policies is clear, and it is necessary to strengthen the key construction of urban renewal. In the next step, the National Development and Reform Commission will combine its functions, continue to coordinate and make good use of various funds, arrange the list and investment plan of relevant projects in advance, accelerate the construction of eligible projects, and improve the sustainable renewal and transformation mechanism. At the same time, we will actively promote the upgrading and transformation of urban infrastructure, fill the gaps in urban infrastructure as soon as possible, fully unleash the huge potential of China’s new urbanization, and form new economic growth points.
Classify and orderly promote the implementation of updating and transformation tasks
Distinguish the importance and urgency of tasks, organize and implement urban infrastructure improvement and renovation actions based on the short-term focus on eliminating safety hazards, mid-term promotion of aging facility updates, and long-term promotion of facility functionality improvement. Liu Sushe introduced that priority should be given to promoting the construction of urban pipeline network safety improvement, livable renovation of old residential areas, comprehensive renovation of urban villages, and safety renovation of urban transportation facilities that involve major public safety and important livelihood guarantees. The transformation and quality improvement of old neighborhoods (old factory areas) and the enhancement of urban public service functions should be orderly promoted.
Priority will be given to supporting a number of key urban renewal projects in the early release of the list of “Two-importance” construction projects for next year and the central budget investment plan.
“At present, there is a large demand for funds for urban underground pipeline networks, and many projects are relatively mature. We want to give priority to supporting a number of key urban renewal projects in the next step when we issue approvals in advance.” Liu Sushe said that from 2023-2024, the National Development and Reform Commission will arrange investment within the central budget, additional treasury bond funds and ultra long term special treasury bond funds totaling more than 470 billion, focusing on supporting urban renewal projects such as urban gas, drainage and other underground pipeline networks and urban old residential areas.
Urban renewal remains a key focus of government investment support
“In the next few years, urban renewal will still be a key focus of government investment support, and efforts will continue to be increased in 2025. ” Liu Sushe said that urban renewal accounts for a certain proportion in the two 100 billion project lists and investment plans, mainly arranging the construction of urban gas, water supply and drainage, heating and other pipeline networks, highlighting key cities and central urban areas with large population scale and high density, focusing on supporting construction projects in progress and projects that can start in the fourth quarter of this year, promoting solutions to prominent problems such as aging gas pipeline networks, urban waterlogging, and water supply pipeline leakage. At the same time, it is necessary to continue to coordinate and increase central budget investment in urban renewal projects such as the renovation of old urban communities, urban village renovation, and dangerous old housing renovation. It is also necessary to study the inclusion of urban renewal projects with certain returns, such as the renovation of old neighborhoods (old factory areas), in the scope of local government special bond support.
Actively explore innovative financing models.
Urban renewal contains enormous market potential, and the investment amount of projects is relatively large. Relying solely on government investment is far from enough. It is necessary to establish a diversified investment mechanism and also make great efforts to attract widespread participation of private capital. Liu Sushe stated that we will improve the investment mechanism and efficiency in areas with high marketization and strong business attributes, and fully leverage the role of market mechanisms. For areas with moderate return levels and investment willingness from social capital, the new mechanism of government and social capital cooperation, namely the PPP mechanism, as well as the role of infrastructure REITs, will also be fully utilized to form a sustainable renewal and transformation model guided by the government, operated by the market, and participated by the whole society.
Further increase the guidance for domestic transformation efforts in China
At the beginning of the year, the Minister of Housing and Urban Rural Development proposed to renovate approximately 100000 kilometers of various pipelines; According to the calculation of 600000 kilometers in the next 5 years, it is expected that an average of 120000 kilometers will be renovated annually, and the renovation efforts will be further increased. Underground pipelines, including water supply and drainage, gas, heat, electricity, communication, etc., are important infrastructure in cities.
According to the National Development and Reform Commission, from 2023 to 2024, the National Development and Reform Commission will allocate more than 470 billion yuan in central budget investment, additional treasury bond funds and ultra long term special treasury bond funds. In the past, urban renewal focused on installing elevators, repairing roads, and other work, but now the focus is shifting to the urban pipeline network.
In addition, due to the impact of this policy, funds approved in advance next year are expected to enter first, and physical workload is expected to be formed in Q4 of 2024. Based on a potential investment scale of 4 trillion yuan over 5 years and an average annual investment of 800 billion yuan in urban pipeline network renovation, the resolution of funding conflicts is expected to bring huge new markets to upstream and downstream, while improving the collection environment.
