(Yicai) June 8 -- China will allocate CNY160 billion (USD23.6 billion) in government bond funds this year for the construction and renovation of urban underground pipeline networks, as authorities accelerate implementation of the country’s newly unveiled urban renewal strategy.

The funding, which will be provided through ultra-long-term special government bonds, is CNY25 billion (USD3.7 billion) more than last year’s allocation. The investment forms part of a broader urban renewal program outlined in China’s first national urban renewal plan for the 15th Five-Year Plan period (2026-2030).

The National Development and Reform Commission and China’s housing ministry will support the construction and upgrading of urban gas, drainage, water supply, and heating pipelines, Guan Peng, head of the NDRC’s fixed-asset investment department, said at a press conference today.

The government also plans to allocate CNY97 billion in central budget funds for urban renewal projects, focusing on the renovation of aging residential communities and dilapidated housing. The projects are expected to benefit around eight million households by improving living conditions and expanding public service facilities, Guan said.

Five-Year Urban Renewal Targets

On May 28, China’s State Council released the urban renewal plan for the 15th Five-Year Plan period, setting targets to renovate 500,000 dilapidated urban housing units, around 115,000 old residential communities, 1,500 aging neighborhoods and industrial zones, and 4,000 urban villages between this year and 2030.

China also plans to invest a total of CNY5 trillion (USD736.9 billion) over the next five years in urban underground pipeline construction and renovation. The investment will cover about 200,000 kilometers of gas pipelines, 175,000 kilometers each of drainage and water supply networks, 100,000 kilometers of sewage pipelines, and 120,000 kilometers of heating networks, according to previous State Council announcements.

Institutional estimates suggest the plan could drive at least CNY15 trillion (USD2.2 trillion) of urban renewal investment over the next five years, lifting annual investment levels above the CNY2.6 trillion recorded in 2023 and the CNY2.9 trillion reported in 2024.

Since 2024, China’s finance ministry and housing ministry have supported selected cities in launching urban renewal initiatives ahead of a nationwide rollout. Over the past three years, 50 key cities, including Beijing and Shanghai, have been designated as pilot areas, Guo Fangming, director of the finance ministry’s economic construction department, said at the same press conference.

During the 15th Five-Year Plan period, the 50 pilot cities will explore replicable and scalable urban renewal mechanisms in line with the plan’s objectives. The finance ministry will also coordinate multiple funding channels to support urban renewal projects, including eligible financing through special local government bonds, Guo said.

Editors: Dou Shicong, Emmi Laine