(Yicai) June 1 -- China has issued its first national urban renewal blueprint, which will likely entail investment of at least CNY15 trillion (USD2.2 trillion) over the next five years, according to a research report by Huachuang Securities.

The State Council, China’s cabinet, released the urban renewal blueprint for the 15th Five-Year Plan, which covers the period through 2030, on May 28. It sets a target for renovating 500,000 dilapidated and dangerous housing units, 115,000 old residential communities, 1,500 outdated commercial and industrial districts, and 4,000 urban villages.

Under the new plan, investment in urban renewal projects will average about CNY3 trillion (USD443.3 billion) a year between 2026 and 2030, per Huachuang’s report released the day after. By comparison, China spent CNY2.6 trillion and CNY2.9 trillion in 2023 and 2024, respectively, on 60,000 projects each year, the housing ministry said previously.

The government will conduct a special assessment of urban communities that were built more than 20 years ago, evaluate their conditions, identify renovation targets, and fix shortcomings in infrastructure, such as adding elevators to eligible buildings.

The plan also specifies the need to establish a sustainable investment and financing system that involves the joint participation of fiscal funds, financial institutions, and social capital to meet substantial project funding needs.

These three funding types will each serve different functions, Tang Daizhong, deputy director of the construction management and real estate department at Tongji University, told China Central Television. Fiscal funds will serve as project capital to provide a safety net, financial institutions will expand the financing capacity through leverage, and social capital will help with the long-term operation and maintenance of projects, he said.

Local governments will also be permitted to issue special bonds to finance eligible projects and promote the issuance of asset-backed securities, including real estate investment trusts, for certain projects.

China also plans to build and renovate about 770,000 kilometers of urban underground infrastructure in the next five years, with a total investment of CNY5 trillion. It comprises around 200,000 km of gas pipelines, 175,000 km each of drainage and water supply networks, 100,000 km of wastewater pipelines, and 120,000 km of heating pipes.

During the 15th Five-Year Plan period, the investment multiplier for the construction and renovation of national pipeline networks will likely reach 1.5 to two times, much higher than that of a typical infrastructure project, Lv Hongliang, senior engineer at the China Academy of Urban Planning and Design, told CCTV.

Editors: Dou Shicong, Futura Costaglione