China to redevelop slum towns to boost domestic demand

BEIJING (REUTERS) - China will increase financial incentives and make more land available to redevelop run-down and overcrowded slum towns as it looks to boost domestic demand and pursues urbanisation, the State Council, or Cabinet, said on Wednesday.

Some 10 million such towns, located on the edges of big cities and usually home to migrant workers or the unemployed, will be in line for redevelopment in the next five years, with over 3 million targeted for improvement this year.

The State Council said at a regular meeting that China will maintain the stability and continuity of its policies to anchor market expectations, but will continue to control its booming property market. It will also take measures to boost domestic demand.

"For example, the revamp of such towns could become a new source of economic growth," it said in a statement on its website

It said it will guide financial institutions to give monetary support to such towns, and companies involved in redevelopment projects will be allowed to issue bills and bonds and get preferential tax treatment. The central government will also increase land supply for rebuilding such towns.

China plans to spend some 40 trillion yuan (S$8.3 trillion) to bring 400 million people to its cities over the next decade as it tries to sustain economic growth.

Join ST's Telegram channel and get the latest breaking news delivered to you.