Xi Jinping heralds new urban growth model at Central Urban Work Conference

We told you not to get your hopes up.

On Tuesday, the top leadership wrapped up the two-day Central Urban Work Conference.

• The meeting is a big deal – all seven members of the Politburo Standing Committee were in attendance.

At the conference, Xi Jinping heralded a fundamental change in China's approach to urban development:

• "From large-scale expansion to improving the quality and efficiency of existing assets...[and] stronger investment in urban governance"

In case you're still wondering: That means a massive property stimulus – à la Beijing’s 2014 shantytown redevelopment push – isn’t coming to the rescue.

Instead, as we anticipated, efforts will focus on the smaller-scale urban renewal program, including:

• Steadily advancing the renovation of urban villages and dilapidated housing
• Accelerating upgrades to aging utility pipelines
• Strengthening disaster prevention in cities by enhancing flood control and preventing waterlogging

Get smart: Beijing is pursuing a new urban growth model focused on improving existing assets rather than new expansion.

• That will dampen demand for greenfield projects – but create tailwinds for urban retrofitting and smart city technologies.
• The focus on improved city governance also points to rising demand for urban services.

What to watch: The shift away from large-scale urban expansion is yet another nail in the coffin for local governments’ reliance on land sales revenue.

• Will Beijing finally get serious about long-delayed tax reforms to shore up local finances?