The Chinese Communist Party’s Ministry of Natural Resources recently declared in a document that urban construction in China has entered the “stock era”. The government stated that in the future, the focus will be on revitalizing and optimizing existing urban areas rather than massive demolition and construction, making it a key direction for national land spatial planning. Observers suggest that this signifies the end of China’s fifteen-year era of “construction frenzy”, transitioning from the illusion of prosperity built on steel and concrete, back to a moment of reckoning with debts and reality.
On October 11th, official Chinese state media such as Xinhua News Agency and Global Times reported that the Ministry of Natural Resources issued the “Guidelines for Revitalizing and Optimizing Urban Stock Space”, calling for strict control of new land development, activating existing resources, optimizing urban structures, and improving efficiency to promote urban space regeneration through measures like rehabilitating underutilized land, redeveloping old towns and industrial areas, and revitalizing historical neighborhoods.
Many believe that this document reflects Beijing’s struggle to sustain its infrastructure development model driven by debt under financial pressure. Urban planning scholar Zhang Zunyi from Beijing commented, “This guideline is essentially a declaration by the authorities to curb the construction frenzy. With local finances no longer able to support massive demolition and construction projects, the central government is using ‘activating existing resources’ as a cover for contraction, much like labeling unemployment as flexible employment.”
Since the Chinese State Council launched a 4-trillion-yuan stimulus package in 2008, a construction boom swept across the country – massive infrastructure projects, rapid urban expansion. This movement has drained public finances, while also enriching elites and creating a new class of wealthy individuals. “Now forced to stop, it is not a result of policy awakening but rather a halt due to lack of funding. When the money dries up, everything goes back to square one. This pause may even slow down initiatives like the Belt and Road, although it won’t be openly acknowledged,” Zhang Zunyi added.
China has long been labeled as a “construction maniac” by outsiders. Since the global financial crisis in 2008, governments at all levels have relied on infrastructure investments to drive GDP growth – high-speed rail, highways, subways, airports, exhibition centers, and even replica ancient towns have sprung up like mushrooms.
According to the official statistics from the Chinese Ministry of Transport, China’s high-speed rail network exceeds 40,000 kilometers, and the total length of highways surpasses 180,000 kilometers, both ranking first globally. However, this nationwide construction spree was built on land financing and debt leverage.
As demographic dividends decline, the real estate market cools, and land transfer revenues plummet, the financial foundation supporting this model begins to weaken. Many cities now bear idle airports, vacant new districts, and “ghost town” replicas as symbols of “achievement whitewash” and “debt black holes”.
A real estate analyst from a large state-owned enterprise in Beijing, using the pseudonym Li Kang, pointed out, “So-called ‘activating existing resources’ is just a linguistic substitution under debt pressure. After land sales revenue sharply decreased, local governments struggle to maintain existing expenditures. Urban renewal is seen as a new breakthrough, yet the return on investment is long-term and limited. This is not a new model, but a prolongation of the old one.”
According to the International Monetary Fund (IMF), by 2025, the total explicit and implicit debts of Chinese local governments have approached 90% of the gross domestic product (GDP). The fiscal cycle of “debt supporting debt, and construction promoting growth” is nearing exhaustion, leaving local governments no choice but to find new “growth narratives” within existing urban spaces.
Despite highlighting the “technical” and “operational” aspects, implementation issues persist at the local level. Many so-called “revitalization projects” are actually led by capital, displacing residents, erasing community memories, and replacing renovated spaces with high-end commercial developments.
Zhang Zunyi explained, “Without transparent property rights and public participation, ‘revitalization’ is merely an extension of the old order. The issue lies not in how to transform cities but in who commands the transformation and who benefits from it.”
Investment scholar Li Yang from Shandong University noted that China’s “stock era” is not the result of rational planning but rather an economic necessity. He said, “As incremental land supplies dwindle and investment momentum fades, the government can only shift from ‘building’ to ‘upkeeping,’ transitioning from a pursuit of speed to cost reduction and repairs.”
He added, “This linguistic shift marks the end of the construction frenzy. Regions that previously boasted about achievements like ‘building bridges and roads’ are now faced with the reality of ‘maintenance, debt repayment, and debt reduction’. Beside grand high-speed railway stations lie deserted shopping districts and stagnant housing prices. People are starting to see that behind all the ‘construction’ lies escalating debts and endless corruption.”
Many economists point out that the move towards “no longer massive demolition and construction” may appear to be a rational return to urban planning, but it actually reveals structural imbalances and financial exhaustion. Li Yang believes, “As investments, exports, and land dividends all hit their peaks simultaneously, the construction frenzy becomes unsustainable. The electric vehicle industry, which relied on fiscal subsidies, is now following a similar trajectory.”