China has announced plans to provide increased support for property construction by focusing on the renovation of "urban villages" in major cities. These urban villages, also known as "villages within a city," have emerged as a result of rapid urbanization and blend rural villages with towering skyscrapers in China's biggest cities such as Beijing and Shenzhen. In an effort to stimulate economic growth and expand domestic demand, the government aims to encourage urban innovation and attract more private capital into these renovation projects.
The State Council, chaired by Premier Li Qiang, discussed the need to boost the economy during a meeting. To address the worsening downturn in the property sector, declining exports, and cooling consumer spending, the government is taking proactive measures. With economic growth falling short of estimates in the second quarter, there is growing concern about the government's target of achieving approximately 5% expansion by 2023.
Renovating urban villages and revitalizing run-down areas has been a priority for the government, particularly in cities like Shanghai. The city has been demolishing and redeveloping densely populated neighborhoods to make way for new residential and commercial complexes, driving growth in the process. By refurbishing existing districts, China aims to make better use of its urban infrastructure without expanding city borders significantly.
The government's plan involves easing home buying restrictions in major cities and focusing on the construction of elevators in certain apartment complexes. Moreover, the housing ministry has called for more redevelopment projects to modernize older properties. The government has set a target to complete renovations on approximately 219,000 residential complexes between 2021 and 2025, as stated by the official People's Daily.
China's urbanization has made significant progress, with nearly two-thirds of the population living in cities by 2022, almost double the number two decades ago. Therefore, the focus now shifts from expanding city borders to revitalizing and improving existing districts. By supporting urban redevelopment, China aims to stimulate economic growth, attract private investment, and meet its development targets.