China ramped up support for property construction by calling for the renovation of “urban villages” in big cities in its latest move to boost the economy.
(Bloomberg) — China ramped up support for property construction by calling for the renovation of “urban villages” in big cities in its latest move to boost the economy.
The government will increase policy support for urban innovations and seek more private capital in the projects to expand domestic demand and push forward development of cities, state radio reported citing the State Council meeting chaired by premier Li Qiang on Friday.
Hundreds of urban villages, or better known as “villages within a city” exist in China’s biggest cities from Beijing to Shenzhen as the rapid urbanization enclaves rural villages with skyscrapers. Shanghai has for years been razing and redeveloping the densely populated neighborhoods to make room for new residential and commercial complexes and drive growth.
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Investors have been awaiting news from Beijing about measures to bolster the economy. Recent data showed a worsening downturn in the property sector, contracting exports and cooling consumer spending. Economic growth missed estimates in the second quarter, leading investment banks to downgrade their forecasts and putting the government’s 2023 expansion target of around 5% at risk.
Support for the economy has largely been targeted and limited. Officials earlier in July extended loan relief for real estate developers. They’ve also offered tax breaks on electric car purchases and pledged to help private firms.
The government is considering easing home buying restrictions in the nation’s biggest cities and wants to refurbish run-down areas, Bloomberg News reported earlier. China’s housing ministry had called for more redevelopment projects, with a focus on building elevators in some apartment complexes.
Urbanization in China is already advanced. Nearly two-thirds of the population lived in cities in 2022, almost double the number two decades earlier. That means China is no longer looking to expand city borders so much as refurbish existing districts.
The government has said it plans to finish renovation on about 219,000 residential complexes between 2021 and 2025, according to the official People’s Daily.
–With assistance from Li Liu.
(Updates with background on urban villages in the third para.)
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