The State Council recently issued the "Five-Year Action Plan for In-depth Implementation of the New Urbanization Strategy with a People-oriented Approach", which deploys the overall requirements, key tasks, policy measures, and organizational implementation for promoting new urbanization construction in the next five years. The "Action Plan" specifically proposes four major actions, 19 key tasks, and related policy measures.

Affected by this news, the new urbanization sector was collectively active today, with Ying Jianke rising by the limit of 20 cm, Hainan Ruize up more than 8%, Xin Chengshi up more than 6%, Shanshui Bi De and Leo Planning up more than 3%.

The route for the next five years is clear.

The "Action Plan" proposes that after five years of effort, the channels for transferring agricultural population to urban areas will be further unblocked, the system for providing basic public services in the place of permanent residence will be further improved, the coordinated development of new industrialization and urbanization in potential areas will be significantly accelerated, a number of modern urban agglomerations with strong radiating and driving forces will be nurtured, and the shortboards of urban safety resilience will be effectively supplemented, and the urbanization rate of the permanent population will be increased to nearly 70%, better supporting high-quality economic and social development.

In terms of further deepening the household registration system reform, the "Plan" proposes to relax the household registration restrictions except for a few super large cities and implement the household registration system based on the place of usual residence. Fully implement the cancellation of household registration restrictions for cities with a permanent population of less than 3 million in urban areas, and fully relax the conditions for permanent urban residence in cities with a permanent population of 3 million to 5 million in urban areas. Improve the policy of accumulation of scores for household registration in super large cities with a permanent population of more than 5 million, and encourage the cancellation of annual household registration quota restrictions.

Regarding the implementation of urban renewal and safety resilience enhancement actions, deepen the reform of urban construction, operation, and governance systems, and accelerate the transformation of urban development modes. Promote the formation of a new smart and efficient governance system for super large and mega-cities. Increase the support for the construction of affordable rental housing, renovation of old urban areas, aging and upgrading of urban gas pipelines and other aging and upgrading projects, and public infrastructure construction for super large and mega-cities using central fiscal construction funds for eligible projects. The central finance will actively support the subsidy funds for urban guarantee housing and the reconstruction of urban villages for eligible projects.

Regarding the promotion of renovation of old urban areas, the "Plan" proposes to focus on the updating of supporting facilities such as water, electricity, roads, gas, postal service, heating, fire protection, security, and domestic garbage classification and maintenance of public places in the community. To solidly promote the task of renovating urban old residential areas built before the end of 2000, and to implement the renovation and reinforcement of urban housing construction in an orderly manner.

Regarding enhancing the comprehensive carrying capacity of urban areas, the "Plan" proposes to promote the cultivation and development of provincial sub-central cities where conditions permit, effectively share the non-core functions of provincial capital cities. Promote the upgrading of industry and population carrying capacity in node cities, focus on developing productive service industries around dominant industries, strengthen the planning and layout of high-level tertiary hospitals and higher education institutions, and radiate and drive population agglomeration in the city.

It will become a new growth point of China's economy.

In this year's government work report, "actively promoting new urbanization" was mentioned again.

Wei Jianguo, former deputy minister of the Ministry of Commerce and deputy director of the China Center for International Economic Exchanges, also said that the new urbanization has comprehensive benefits. From the perspective of internal demand, it is a large platform for investment and consumption combining investment and consumption, and will become a new growth point of China's economy.

From the current perspective, the urbanization rate of China has exceeded 66% as of 2023, and in 2018 it was 61.50%. According to the current development process of urbanization rate, it can be basically achieved to increase it to 70% in five years.

In addition, the new urbanization is an important support for optimizing the development and protection pattern of national land space.

As of now, 19 city clusters including Beijing-Tianjin-Hebei, Yangtze River Delta, Chengdu-Chongqing, and the middle reaches of the Yangtze River have carried more than 75% of the country's population, becoming the main form of China's new urbanization.

The Central Economic Work Conference also proposed to combine the promotion of new urbanization with the comprehensive revitalization of rural areas by 2024, promote the two-way flow of various factors, promote the construction of new urbanization with county towns as an important carrier, and form a new pattern of integrated urban-rural development.

Galaxy Securities previously released a research report, stating that the development of urbanization in China is regionally differentiated, and as of 2022, the urbanization rate in 19 provinces is less than 60%. China's current level of urbanization rate still has a distance to go from the "bottleneck period". The endogenous variables for solving the differentiation of urbanization levels among regions are mainly to improve urban governance level through urban reform, urban basic infrastructure construction, and then drive industrial upgrading and release housing demand. The exogenous variables are mainly labor force inflow driven by the changes of urban industrial structure in economic development, so as to improve the local urbanization rate. Head real estate enterprises have rich experience in the transformation of urban villages and supplemental urban construction, and are expected to demonstrate excellent operational capabilities.

CITIC Securities also believes that the new urbanization means new multi-level real estate spatial demand, including the demand for affordable residential space, improvement-type large-scale commercial housing, urban renewal, and high-quality commercial real estate space. The demand of urbanization for space not only means the need to build a new batch of real estate, but also means that there are more demands related to real estate operation and circulation.