China to Invest More in Rebuilding Shantytown Projects
China has gathered new investment to support its shantytown infrastructure construction a move that will inject new vitality to the slumping and construction industries according to an official from the Housing and Urban and Rural Development Ministry. Another 10 billion yuan will be on hand to help infrastructure construction as part of the government support for shantytown renovation which has been aggressive this year. Even with the economic situation it is not easy for the central government to set aside that much money for the sector.
The country dedicated around 150 billion yuan coming from the central budget to help rebuild its shantytown for this year plus another 36 billion in the renovation of dilapidated rural housing. These renovations in the shantytown accounts for a large part of the national budget funds for this year which is said to be at 477 billion yuan. And according to Zhang Hanya the president of the Investment Association in China the new funding is relatively good news for property companies since some of them are providing shantytown renovation services to local governments.
For the first five months of this year the amount of land that was purchased for real estate development decreased by 31 percent and new construction starts also went down by 16 percent. Due to this it prompted the State Council to decide and create a action plan to rebuild 18 million low costs housing units in shantytowns and to renovate dilapidated rural housings for 10 million households for 2015 until 2017.
The local and central government budgets are the two major financing sources for the renovation projects and the central government has already urged regions to make the funds available in order to support the budgeting of local government of the shantytown renovations. Cities with budget shortfalls the provincial government can offer help by giving local government bonds in their behalf since most of the local governments are under financial pressure since their income from land sales are shrinking.
Also original financing platforms also go through market oriented restructuring in order to play a role in the rebuilding of these shantytown projects.