State Council Issues 15th Five-Year Urban Renewal Plan; CDB Loans Hit RMB 786.3 Billion in 2025

The Urban Renewal Plan for the 15th Five-Year Period, issued by the State Council, is China's first national-level special plan for urban renewal, setting out the timeline, task list and roadmap for urban renewal over the next five years. Given the enormous funding needs and long investment cycles inherent in urban renewal, the plan proposes building a sustainable investment and financing system for urban construction and operation, encompassing improved fiscal support policies, optimised financial support measures and greater participation of social capital.

On the fiscal front, the plan makes arrangements for support policies including central budget investment, central fiscal support for urban renewal initiatives, local government special bonds and local fiscal input. Guo Fangming, director of the Economic Construction Department of the Ministry of Finance, said that during the 15th Five-Year period, central finance will maintain a relatively strong level of support, continuously optimise policy design and improve the efficiency of fund utilisation. The Ministry of Finance, the National Development and Reform Commission and other departments will coordinate various funding channels to support key urban renewal tasks. The urban renewal special programme under central budget investment, established in 2025, focuses on supporting projects such as the renovation of old residential communities in cities and towns and the redevelopment of dilapidated urban housing. Under the "two major" initiatives, ultra-long-term special treasury bonds will support the construction and upgrading of underground pipeline networks for gas, drainage, water supply and heating.

Since 2024, central finance has supported demonstration urban renewal work in selected cities, providing fixed subsidies based on regional and city-specific conditions. Over the past three years, 50 shortlisted cities including Beijing, Shenyang and Urumqi have been supported in piloting initiatives, advancing key model projects and mechanism building, and guiding localities to coordinate fund utilisation and staggered arrangements, combine investment with consumption, and pair "investment in physical assets" with "investment in people". At the same time, performance evaluations have been conducted on subsidy funds supporting urban renewal initiatives, with strengthened performance management and debt constraints. During the 15th Five-Year period, these 50 cities will explore replicable and scalable urban renewal mechanisms in line with the work targets set out in their implementation plans. The Ministry of Finance will work with the Ministry of Housing and Urban-Rural Development to strengthen guidance, summarise experience in a timely manner and promote it where appropriate, while further studying and refining policy measures.

The plan places emphasis on mobilising the initiative of local fiscal authorities, allowing local government special bonds to support the construction of eligible urban renewal projects and to be used as project capital. Local governments are encouraged to increase fiscal input and, on the premise of ensuring the completion of national tasks, promote the integration and coordinated use of relevant funds.

On the financial support front, the plan calls for leveraging the role of various financial institutions, guiding them to provide financial services for urban renewal projects within their business scope in accordance with market-oriented and law-based principles, while prohibiting the creation of new implicit local government debt. For projects that are risk-controllable, commercially sustainable and eligible, market-based models such as comprehensive development and syndicated loans may be adopted. The plan also calls for exploring effective measures for financial support of voluntary renewal of old urban housing and demolish-and-rebuild-in-place schemes.

In Suzhou, Jiangsu Province, financial services are being provided in a compliant and efficient manner through an investment-loan linkage model combining CDB-type new policy-based financial instruments with supporting loans, as well as diversified financial products such as fixed-asset-backed loans. Commercial banks are actively participating in urban renewal projects. The Wuhan branch of Industrial and Commercial Bank of China has launched 18 categories of loan products, including fixed-asset loans and district development loans, to systematically support the diversified financing needs of urban renewal across the full project cycle.

On social participation, the plan proposes actively attracting social capital, following the principle of "those who benefit, pay", fully leveraging market mechanisms and building a reasonable cost-sharing framework among government, market and residents. It calls for standardised implementation of the new government-social capital cooperation mechanism, encouraging private enterprises to actively participate in the construction and operation of urban infrastructure, and advancing public utility price reform in a steady and prudent manner. The plan also proposes promoting the issuance of infrastructure real estate investment trusts (REITs) and asset securitisation products for eligible urban renewal projects, and supporting eligible urban renewal enterprises in issuing corporate bonds and medium-term notes. For projects with strong innovation in investment and financing models and good demonstration value, central investment will provide appropriate guidance and support.