Economic Daily:

You mentioned earlier that the package of incremental policies includes a significant demand for additional funds for urban renewal. We understand urban renewal encompasses renovating old residential areas, upgrading underground pipelines, and more. Could you elaborate on the specific support policies in place, especially regarding financing support? Thank you.

Zheng Shanjie:

Thank you for your question. I'd like to invite Mr. Liu to answer it.

Liu Sushe:

Thank you for your question. Currently, China's urban development has entered a stage where both new construction and renewal of existing infrastructure are equally important. Urban renewal and renovation tasks will become increasingly demanding in the coming years. For example, it's estimated that nearly 600,000 kilometers of gas, water supply, sewage, and heating pipelines will need upgrading over the next five years, with a total investment demand of about 4 trillion yuan.

The package of incremental policies clearly emphasizes strengthening key urban renewal projects. Moving forward, we'll coordinate various funding sources, release project lists and investment plans in advance to expedite eligible projects, and establish a sustainable renovation mechanism. We'll actively improve urban infrastructure, quickly address weaknesses, and fully tap into the vast potential of China's new urbanization, creating new drivers for economic growth. Our next steps include:

First, we'll advance urban renewal projects by type and in an orderly manner. Prioritizing tasks based on urgency, we'll focus on eliminating safety hazards in the short term, upgrading aging infrastructure in the mid-term, and enhancing facility functions in the long term. We'll launch a comprehensive urban infrastructure upgrade campaign, prioritizing projects critical to public security and well-being. These include improving underground pipeline networks, renovating old residential communities, revamping urban villages, and enhancing urban transportation infrastructure. We'll also proceed with transforming old neighborhoods and industrial areas, and upgrading urban public services in a well-planned way.

Second, we'll prioritize financing key urban renewal projects in next year's list of projects related to implementing major national strategies and building up security capacity in key areas as well as in the central budgetary investment plan. There's significant funding demand for urban underground pipeline networks, with many projects ready for implementation. We'll focus on supporting these key projects in the next stage. From 2023 to 2024, the NDRC has allocated over 470 billion yuan from the central government budget, additional treasury bonds, and ultra-long special treasury bonds to support urban gas and drainage pipeline renovations and old urban community renewals. Urban renewal will remain a priority for government investment in the coming years, with efforts continuing in 2025. In the two 100-billion-yuan project lists and investment plans, urban renewal accounts for a significant proportion, focusing on gas, water supply, sewage, and heating pipeline construction, especially in densely populated cities and central urban areas. These funds will primarily support ongoing projects and those ready to start in the fourth quarter, addressing critical issues like aging gas pipelines, urban flooding, and water pipe leakage. We'll also increase central government budget investment in renovating old urban residential communities, urban villages, and dilapidated housing. We're exploring the possibility of including urban renewal projects that generate returns, such as renovating old neighborhoods and industrial areas, in local government special-purpose bonds.

Third, we'll actively explore innovative financing models. Urban renewal holds significant market potential, and the scale of investment required is too large for government funding alone. Establishing diversified investment mechanisms and attracting broad participation from private capital is essential. For sectors with high marketization and strong business competitiveness, we'll enhance investment mechanisms and boost efficiency, fully leveraging the role of the market. In areas with moderate returns where private capital is willing to invest, we'll fully leverage the role of the new public-private partnership (PPP) mechanism and infrastructure REITs. This will help establish a sustainable renewal and upgrading model that integrates government guidance, market operations, and participation from all sectors of society.

Thank you.