China pledges sustainable urbanisation and has declared a radical shift in its approach to urban development, focusing on resilient, sustainable, and livable cities instead of the fast, construction-driven expansion that previously drove its economy. President Xi Jinping and other officials presented a vision for urbanization that emphasizes sustainability, efficiency, and quality over unbridled growth at the Central Urban Work Conference, the first high-level urban planning gathering in ten years. The strategy that drove China’s economic growth but left behind “ghost cities,” rife real estate speculation, and massive debt loads is markedly different from this.

China Pledges Sustainable Urbanisation: A Shift Toward Quality and Efficiency

For many years, China’s urbanization strategy relied heavily on rapid city growth, primarily driven by real estate and construction, to propel economic prosperity. Due to a lack of demand, this strategy led to an excess of housing in some areas, resulting in “ghost cities” where houses remained unoccupied. Since its collapse four years ago, the property sector—once a pillar of the economy—has been in decline, currently accounting for around 25% of total economic activity.

In June 2025, new home prices dropped at their quickest rate in eight months, highlighting the industry’s continued difficulties. The recent conference, according to Xinhua, marked a shift away from extensive expansion and towards enhancing the “quality and efficiency of inventories.” This includes taking a measured approach to urban redevelopment, focusing on renovating rundown houses and urban villages without resorting to extensive stimulus plans.

This new paradigm, according to analysts like ANZ’s senior China strategist Xing Zhaopeng, places real estate as an effect of economic growth rather than its catalyst, indicating little immediate respite for the struggling real estate market.

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Building People-Oriented, Sustainable Cities

To build cities that prioritize the needs of their citizens and environmental sustainability, China has pledged sustainable urbanization, and the conference placed a strong emphasis on a “people-oriented” approach to urbanization. To prevent the imbalances observed in previous decades, when rural interior cities were constructed without adequate economic justification, China aims to coordinate the growth of major, medium-sized, and small cities, as well as small towns.

With stringent restrictions on extremely tall skyscrapers and improved urban flood control systems to enhance resilience, the emphasis will shift to green, low-carbon urban development. This change occurs as China deals with the fallout from its previous urbanisation strategy, which increased demand for steel and concrete globally while frequently ignoring sustainability and liveability.

China aims to develop cities that can better sustain their populations while also helping the nation achieve stable economic growth, targeting approximately 5% per year, by enhancing urbanization capacity and resolving supply-demand imbalances. This new approach reflects a broader understanding that sustainable urban development is crucial to addressing the social and environmental challenges posed by increasing urbanization, while maintaining China’s position as the world’s second-largest economy.

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