Why Xi Jinping Now Prefers Urban Renovation Over New City Development

President Xi Jinping's recent visit to Shanghai carried a significant message about China's urban development strategy. Inspecting a renovated 1950s housing complex, Xi declared that urban development must now focus on enhancing people's quality of life, rather than solely expanding city areas with new projects.

Xi, who also leads the Communist Party of China (CPC), instructed local governments to conduct thorough, meticulous, and effective urban renewal. The goal is to boost residents' satisfaction, happiness, and sense of security. He highlighted the renovation of old residential areas as a crucial component of a people-centered modern urban development strategy.

During his tour of the Huangpu District, Xi visited a revitalized housing complex where four apartment blocks from the 1950s underwent comprehensive renovations, significantly improving living conditions. He even visited a retiree's home to witness firsthand the residents' living situations. "We serve the people. When the people live peacefully and are content, only then can the Party and the government feel at ease," Xi told local residents.

He also inspected a local food market, urging authorities to continuously improve community governance, upgrade public facilities, and create comfortable living environments. Observers view this visit as indicative of a major shift in China's economic development strategy. For over three decades, economic growth was largely driven by the construction of new cities, industrial zones, apartments, and large-scale infrastructure projects.

Now, the policy direction is pivoting from expansion to revitalization. This change is partly a response to the bursting of China's property sector bubble, which had fueled economic growth for years. Soaring housing prices spurred massive development across numerous cities, with many local governments heavily relying on land use rights sales to developers for revenue.