CHINA Trends and Developments Contributed by: Zheyuan Jin, Xiang Mao and Lingyue Sun, Merits & Tree Law Offices
cessful existing asset renewal project often requires joint planning and execution by financial investors, industrial resources partners, space operators and even cultural content IP holders. This has formed a value co-creation network anchored by the asset itself. Revitalising the Assets Market Through State- Owned Enterprises In recent years, China’s state-owned enterprises (SOEs) have been actively participating in the revi - talisation of existing land assets, driven and guided by national macroeconomic policies. This endeavour has evolved from sporadic, small-scale land dispos - als into a systematic, nationwide initiative that lever - ages market-based mechanisms to unlock the value of dormant assets. The policy trajectory has been clear and distinct. Fol - lowing the release of the “Opinions on Further Revital - ising Existing Assets to Expand Effective Investment” by the General Office of the State Council in 2022, the Ministry of Natural Resources issued “Notice on Using Funds from Local Government Special Bonds to Repurchase and Acquire Existing Idle Land” in 2024, according to which it is explicitly permitted to use funds from local government special bonds to repurchase and acquire idle land parcels. In the same year, the State-Owned Assets Supervision and Administration Commission of the State Council approved the establishment of a special fund total - ling CNY30 billion, designed to inject direct “vitality” into the upgrade and transformation of SOEs’ existing land and properties. Subsequently, in 2025, multiple ministries jointly issued guiding opinions to further streamline critical aspects related to planning, prop - erty rights and fiscal/taxation matters. This series of policies has formed an increasingly robust framework, sending a clear signal to the market encouraging and standardising revitalisation efforts. Market responses have been swift and tangible. In 2024 and 2025, asset revitalisation became deeply integrated with major national strategies. Numerous SOEs actively responded to government initiatives by converting inefficient industrial and warehousing land into government-subsidised rental housing or public
facilities with “dual-use” capabilities for normal times and emergencies. Furthermore, the maturation and vibrancy of financial exit channels have provided strong support for land revitalisation efforts. For instance, public REITs have gradually developed and matured, with many prod - ucts successfully completing capital-raising through additional offerings in 2024–2025, enabling high-qual - ity industrial park assets to be securitised. This marks the progressive formation of a mature closed loop for investment, financing, management and exit, foster - ing a virtuous cycle where revitalised assets generate stable and ongoing cash flows. Concurrently, vari - ous regions have witnessed the emergence of urban renewal funds, led by SOEs in partnership with private capital, providing seed funding for complex projects requiring upfront redevelopment capital. At the operational level, several common models have emerged. Structurally, many projects establish a Spe - cial Purpose Vehicle through a dedicated or buyout fund to execute a complete closed loop of “acquisi - tion-redevelopment-operations-securitisation/divest - ment”. In terms of development, a model of “co-oper - ation in property rights + specialised operations” has gained traction. SOEs contribute their land resources and credit backing, while real estate funds and other investors are brought in to manage capital-raising, design and construction, and leasing and operations, creating a complementary partnership. In addition, projects frequently prioritise functional conversion and industrial integration, transforming old factory buildings and warehouses into digital economy parks, biotechnology labs or innovation design centres, fun - damentally reshaping the asset base and its profit- generating potential. The revitalisation of state-owned land assets is a dynamic and growing field. Looking ahead, the trend in this sector points toward greater sophistication and specialisation. Concurrently, the asset management capabilities of project participants, rather than mere land ownership, will become the new benchmark for success. Crucially, resolving historical legacy issues – such as changes in land use designation, property subdivision and tax arrangements – will remain cen -
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