Urban Renewal Boosts! Two Ministries Launch Demonstration Projects, Central Finance Provides Key Support for Underground Network Upgrades

Demonstration urban renewal projects are targeted at prefecture-level and higher-tier cities. In 2024, each province (region, municipality) may recommend one city for review.The first batch selected 15 demonstration cities, with priority given to megacities, key cities along the Yangtze River Economic Belt, and major urban clusters. Central financial support will focus on underground network upgrades, sewage system 'factory-network integration' construction, and other critical infrastructure improvements.

Demonstration cities must simultaneously meet the following basic requirements:

1. Establish an organizational leadership and coordination mechanism to drive urban renewal work, and develop a detailed implementation plan;

2. Municipal finances should be sufficient to cover renewal investment needs, with low local fiscal risks, and no new hidden debts should arise from urban renewal projects;

3. No major production safety accidents or serious negative incidents have occurred in housing and urban-rural development over the past year.

Selection of demonstration cities will adopt a competitive evaluation process, emphasizing practical groundwork, solid conditions, and high initiative.

The central government will provide fixed-amount subsidies based on regional categories.Specifically: up to 80 million yuan per city in eastern regions, up to 100 million yuan in central regions, up to 120 million yuan in western regions, and up to 120 million yuan for directly administered municipalities. Funds will be disbursed annually according to project progress.

Demonstration cities will raise funds through multiple channels and systematically advance urban renewal activities, including: upgrading underground utility networks and integrated pipeline systems, constructing 'factory-network integration' sewage systems, improving municipal infrastructure deficiencies, and renovating old urban districts. These efforts aim to optimize urban spatial layouts and enhance city functions. Specific measures include:

1. Underground Utility Network Renovation.Renovate underground networks for gas, heating, water supply, and power, promoting comprehensive pipeline construction in line with local conditions to improve overall network quality and performance.

2. Full Coverage Sewage System Construction in Sample Areas.Retrofit sewage treatment networks using the 'factory-network integration' model to enhance collection and treatment efficiency.

3. Municipal Infrastructure Deficiency Remediation.Upgrade facilities such as household waste sorting, garbage bins, and material flow systems to address infrastructure gaps; enhance green service capabilities and promote public park construction and shared green space access.

4. Old District Renovation.Implement energy-saving and carbon-reduction upgrades to historical cultural streets, existing public buildings, and public spaces; continuously improve building functionality and living environment quality. Advance the full renovation of urban functions, promote age-friendly and child-friendly renovations, and accelerate barrier-free construction in public areas.

Demonstration cities should follow local suitability and urban-specific principles, highlighting key renewal content tailored to their unique challenges, avoiding superficial or 'one-size-fits-all' approaches. They must also align with existing policies, ensuring that specific projects do not duplicate funding from 2023’s increased national debt financing, central budgetary investment, vehicle purchase tax revenue, long-term special bonds, or other central finance sources to prevent overlapping use.

Original text as follows:

Notice on Launching Demonstration Projects for Urban Renewal

MOF & MOHURD Notice [2024] No. 24

To Provincial (Autonomous Region, Municipality) Finance Bureaus (Departments), Ministry of Housing and Urban-Rural Development:

In response to the requirements of the 20th National Congress of the Communist Party of China regarding "implementing urban renewal actions," the Central Economic Work Conference has made concrete arrangements. Starting from 2024, the central government will innovate funding mechanisms and methods to support selected cities in launching urban renewal demonstration projects, focusing on upgrading foundational infrastructure. This aims to further improve urban functions, enhance urban quality, improve residents’ living environments, promote the establishment of "good neighborhoods, good cities," and facilitate the transition from "whether there is" to "how good it is" in urban infrastructure construction. We will actively resolve urgent concerns of the people, supporting high-quality urban development. The following requirements are now issued:

I. Project Goals and Principles

The Ministry of Finance and the Ministry of Housing and Urban-Rural Development will conduct competitive selection to identify cities with strong foundations, high initiative, and distinct features as demonstration models, systematically advancing urban renewal initiatives. The central government will provide designated financial support. Demonstration cities must develop detailed implementation plans, unify fund usage between central and local governments, and establish sound legal frameworks, planning standards, investment mechanisms, and related policies. They should integrate key tasks such as underground network upgrades, 'factory-network integration' sewage system construction, municipal infrastructure deficiency remediation, and old district renovation, continuously advancing urban renewal. Over three years, this will steadily improve underground network integration and safety, significantly enhance sewage collection and treatment efficiency, effectively address infrastructure weaknesses, sustainably advance livable environment upgrades in old districts, meet residents' demand for high-quality life, and form replicable, scalable models and experiences.

II. Support Scope and Application Criteria

Demonstration urban renewal projects target prefecture-level and higher-tier cities. In 2024, each province (region, municipality) may recommend one city for review. The first batch selected 15 demonstration cities, with priority given to megacities, key cities along the Yangtze River Economic Belt, and major urban clusters. Central financial support will focus on underground network upgrades, sewage system 'factory-network integration' construction, and other critical infrastructure improvements.

Demonstration cities must simultaneously meet the following basic requirements:

1. Establish an organizational leadership and coordination mechanism to drive urban renewal work, and develop a detailed implementation plan;

2. Municipal finances should be sufficient to cover renewal investment needs, with low local fiscal risks, and no new hidden debts should arise from urban renewal projects;

3. No major production safety accidents or serious negative incidents have occurred in housing and urban-rural development over the past year.

III. Selection Process

(1) Provincial Recommendation. Provincial finance and housing departments shall select and recommend qualified cities within their jurisdictions, compile implementation plans, and provide necessary supporting materials.

(2) Written Review. The Ministry of Finance and the Ministry of Housing and Urban-Rural Development will organize experts to review submitted proposals. Cities will be shortlisted based on a 120% ratio.

(3) On-site Presentation. Selected cities will present their plans publicly. Experts will conduct on-site evaluations and announce rankings. Top 15 cities enter the final round.

(4) Central Public Announcement. Final candidates will be publicly announced. Cities without objections will be confirmed as demonstration cities. Those with disputes will be verified and disqualified.

IV. Subsidy Standards and Support Scope

(1) Central Government Subsidy Standards. The central government will provide fixed-amount subsidies by region. Specifically: up to 80 million yuan per city in eastern regions, up to 100 million yuan in central regions, up to 120 million yuan in western regions, and up to 120 million yuan for directly administered municipalities. Funds will be disbursed annually according to project progress.

(2) Funding Direction. Demonstration cities will mobilize multiple funding channels to systematically advance urban renewal activities, including: upgrading underground utility networks and integrated pipeline systems, constructing 'factory-network integration' sewage systems, improving municipal infrastructure deficiencies, and renovating old urban districts. These efforts aim to optimize urban spatial layouts and enhance city functions.

Specific measures include:

1. Underground Utility Network Renovation. Upgrade gas, heating, water supply, and power networks, promoting comprehensive pipeline construction in line with local conditions to improve overall network quality and performance.

2. Full Coverage Sewage System Construction in Sample Areas. Retrofit sewage treatment networks using the 'factory-network integration' model to enhance collection and treatment efficiency.

3. Municipal Infrastructure Deficiency Remediation. Upgrade facilities such as household waste sorting, garbage bins, and material flow systems to address infrastructure gaps; enhance green service capabilities and promote public park construction and shared green space access.

4. Old District Renovation. Implement energy-saving and carbon-reduction upgrades to historical cultural streets, existing public buildings, and public spaces; continuously improve building functionality and living environment quality. Advance the full renovation of urban functions, promote age-friendly and child-friendly renovations, and accelerate barrier-free construction in public areas. Demonstration cities should follow local suitability and urban-specific principles, highlighting key renewal content tailored to their unique challenges, avoiding superficial or 'one-size-fits-all' approaches. They must also align with existing policies, ensuring that specific projects do not duplicate funding from 2023’s increased national debt financing, central budgetary investment, vehicle purchase tax revenue, long-term special bonds, or other central finance sources to prevent overlapping use.

V. Daily Monitoring, Supervision, and Performance Management

Provincial housing and urban-rural development departments and finance bureaus shall establish daily monitoring and supervision mechanisms for demonstration cities. Timely report on task implementation, existing issues, and lessons learned to the Ministry of Housing and Urban-Rural Development and the Ministry of Finance (at least once annually per demonstration city). The Ministry of Housing and Urban-Rural Development will prioritize checking task completion, while the Ministry of Finance will focus on reviewing compliance in financial fund utilization. Both ministries will conduct annual performance evaluations based on project outcomes, with the Ministry of Finance responsible for setting evaluation criteria and indicators, and the Ministry of Housing and Urban-Rural Development responsible for organizing implementation and verifying task completion. Evaluation results will be linked to central government fund disbursements. For cities with poor evaluation results, disbursements may be delayed or reduced.

VI. Other Matters

(1) Provinces (regions, municipalities) applying for inclusion must submit applications to the Ministry of Finance and the Ministry of Housing and Urban-Rural Development via official letter before May 24, accompanied by electronic versions (including supporting documents) sent via email or mobile storage devices. Application materials must not contain any confidential files or sensitive information.

(2) To meet tight deadlines, applicant cities must promptly prepare implementation plans, avoid vague or fabricated narratives, and refrain from excessive printing and distribution of materials. In addition to formal documents, implementation plans and supporting materials must also be submitted electronically.

(3) All regions must strictly follow the specified number and requirements when recommending cities and submitting materials, taking responsibility for the authenticity of the content. Cities that fail to apply on time or submit false information will have their eligibility revoked for that year.

Contact Information:

Ministry of Finance, Economic Construction Department: Phone: 010-61965043, Email: shikelu@mof.gov.cn; Ministry of Housing and Urban-Rural Development, Urban Construction Department: Phone: 010-58933160, Email: chengshui@mohurd.gov.cn

Attachments:

1. Implementation Plan for Demonstration Cities in Urban Renewal (Draft)

2. Performance Indicator System for Demonstration Cities in Urban Renewal

Ministry of Finance General Office

Ministry of Housing and Urban-Rural Development General Office

April 30, 2024