2025-05-22
Urban renewal unlocks new demand for steel in China
Recently, China's competent authorities issued the "Opinions on Continuously Promoting Urban Renewal Actions," making a systematic and comprehensive deployment for continuously promoting urban renewal. It is expected that with its gradual implementation and the continuously increasing efforts in urban renewal and transformation, it will become a new factor driving the growth of steel demand and a powerful engine for boosting steel demand.
The "Opinions" issued by the competent authorities is actually a guiding document for cities to implement renewal actions. The strategic goal of urban renewal is to promote the optimization of urban structure, achieve the improvement of urban functions, the continuation of cultural context, and the enhancement of quality, ultimately building all cities nationwide into livable, resilient, and smart cities. The large-scale implementation of urban renewal can effectively stimulate investment and consumption, expand domestic demand, and is of great significance for promoting economic growth and significantly increasing steel demand.
According to the deployment of these "Opinions," future urban renewal will be carried out in the following four aspects: First, strengthen the transformation and utilization of existing buildings and promote the renovation and transformation of old urban communities; second, carry out the construction of complete communities and promote the renewal and transformation of old streets, old factories, and urban villages; third, improve urban functions and strengthen the construction and transformation of urban infrastructure; fourth, repair the urban ecosystem and protect and inherit urban history and culture.
In short, in the future, all cities nationwide will deploy and promote the "four good" construction of good houses, good communities, good neighborhoods, and good urban areas. In particular, it is necessary to promote the "construction of good houses." Not only should we vigorously build safe, comfortable, green, and smart good houses, but we should also strengthen the transformation and utilization of existing buildings, and strive to transform old houses into good houses. We should steadily promote the transformation of dangerous houses, strengthen the transformation and utilization of old factories, inefficient buildings, and traditional commercial facilities, and promote the transformation and mixed use of building functions.
Urban renewal requires the renovation of aging pipelines within communities, the installation of elevators, the renovation and construction of community environments and supporting facilities, the construction of public service facilities and municipal supporting facilities such as parking and charging, and the continuous promotion of the upgrading and transformation of underground pipe networks such as urban gas, water supply, sewage, drainage, and heating. Underground integrated corridors should be built as appropriate, thus generating a large demand for steel. Comprehensive estimates show that if underground integrated corridors are comprehensively constructed in all large and medium-sized cities nationwide, the steel demand generated by this alone may exceed the steel consumption of urban subways nationwide.
Urban renewal cannot be separated from policy support. In terms of financial support, the intensity of central government investment support will continue to increase. According to the plans of the competent authorities, in 2025, central budgetary investment will specifically establish a special fund for urban renewal to support the construction of relevant public infrastructure and public service facilities for urban renewal. Building on the support for the transformation of old urban communities and urban villages, support will be expanded to include projects such as the transformation of dilapidated houses and the upgrading and transformation of old streets and factory areas. Currently, the National Development and Reform Commission is actively organizing plan applications and project reviews, and will issue the 2025 urban renewal special central budgetary investment plan before the end of June this year. At the same time, in the arrangement of special long-term national debt funds for "two major" construction, continued support will be given to projects for the construction and transformation of urban underground pipe networks and facilities. The National Development and Reform Commission will issue the 2025 urban renewal special central budgetary investment plan before the end of June this year.
On the other hand, the Financial Regulatory Bureau is also formulating specific management measures for urban renewal project loans. The Ministry of Housing and Urban-Rural Development will also, together with relevant departments, establish a policy coordination mechanism, implement various support policies, improve diversified financing methods, guide the participation of business entities, and establish a sustainable model for urban renewal that is government-led, market-operated, and publicly participated in. Furthermore, for some time, financial institutions have continuously lowered reserve requirements and interest rates, and it is expected that monetary policy will have further room for easing this year, thus largely ensuring the future funding needs of urban renewal and greatly reducing its funding costs.
It is foreseeable that urban renewal will become a new factor driving the growth of steel demand and a powerful engine for boosting steel demand. (Original article by Lange expert Chen Kexin, please indicate the source when reprinting)
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