China accelerates renovation of urban informal settlements

2024 marks a year of accelerated progress for the renovation of informal settlements within major Chinese cities. By the end of January, several cities had already announced the implementation and allocation of the first special loans dedicated to this initiative.

These loans primarily support initial costs, compensation, and construction of resettlement housing and associated infrastructure for the renovation projects. They operate on a closed-loop, dedicated basis, providing low-cost and efficient financing that adheres to the principle of break-even.

The China Development Bank issued 9.08 billion yuan ($1.26 billion) in special loans for village renovation projects on January 30.

This funding encompasses nearly 100 projects across cities like Guangzhou, Zhengzhou, and Xi'an, directly benefiting over 100,000 residents and facilitating the construction of 238,400 resettlement housing units.

Xi'an itself received 500 million yuan in special loans on the same date, designated for two specific village renovation projects. The Xi'an Housing and Construction Bureau expressed their commitment to actively and steadily promote the initiative, highlighting its potential to enhance urban functionality and stimulate economic growth.

Looking ahead, Huang Yu, CEO of China Index Holdings, predicts that informal settlement renovations within cities will drive an investment scale equating to approximately 1 billion square meters over the next five years.

This translates to an average annual creation of 44 million square meters in new residential demand. The total investment encompassing land acquisition and construction for these renovations is estimated to reach a staggering 10 trillion yuan, Huang said in a speech given at a China News Services event in January.