Modern spatial layouts call for sustainable partnerships among the government, market and society

After the National People’s Congress and the National Committee of the Chinese People’s Political Consultative Conference convened in March, the nation’s development compass has been set toward the critical juncture of the 15th Five-Year Plan (2026-30). As the country has explicitly emphasized “optimizing territorial spatial layout” and “advancing people-centered new urbanization”, with systematic arrangements for “urban renewal” and “integrated urban-rural development”, a pivotal shift is underway in its approach to urbanization and spatial governance. This shift in focus marks the transition toward modern spatial governance aligned with high-quality growth. The core challenge now is to bridge the gap between ambitious spatial planning and effective implementation through innovative public policy, building a governance system fit for the future. Achieving this requires progress in four key dimensions: transforming the governance paradigm, innovating urban renewal, empowering county-level development and harnessing digital technology.

China’s establishment of a unified spatial planning system has resolved past planning conflicts. The new imperative is to ensure these plans translate into high-quality living environments. This demands a dual approach: crafting macro-level strategic plans for major infrastructure upgrades, and refining governance units to address micro-level community needs. A critical innovation is the institutionalization of “consultative planning” through roles such as “municipal chief architects” and “community planners”. Acting as technical advisors and mediators, they foster collaboration between government, residents and developers. The units of renewal may be a single building, a neighborhood block or a pocket park. Community planners engage deeply with residents to determine their needs, and then facilitate negotiations among all stakeholders to optimize outcomes. This transforms governance from top-down supervision to inclusive collaboration.

This quality-oriented shift also presents significant opportunities. It generates new demand for high-caliber architects, planners and designers, urging professionals and academic institutions to adapt swiftly. Architects and designers need to enhance their capabilities promptly to seize these commercial opportunities. Meanwhile, universities and colleges must transform and upgrade their talent cultivation models in relevant fields. Furthermore, big data and artificial intelligence can be powerful tools, helping governments and designers understand residents’ needs and explore viable solutions efficiently, freeing up resources for strategic decision-making.

The breakthrough for urban renewal would be exploring the development of a “community of interests” governance model. Urban renewal is central to revitalizing existing urban stock. The main hurdles are fragmented property rights, funding challenges and limited public engagement. Moving beyond the old model of government-led redevelopment requires a sustainable partnership among the government, market and society.

A “community of interests” governance model allows original property owners to participate in long-term project operations through mechanisms such as equity shares or property swaps and would turn them from passive relocatees into active stakeholders. This would transform short-term bargaining into long-term shared interests, reducing negotiation costs.

Financing models must also innovate. Promoting a whole-lifecycle capital balance approach is key. Drawing on experiences such as urban renewal trust funds, channels for social capital should be opened. Policies should clarify investment return mechanisms and explore tools such as Tax Increment Financing, allowing a portion of the value uplift generated by renewal to fund the project itself.

The county-level urbanization policy toolbox should realize public service equalization and fiscal sustainability. County-level cities are crucial for urban-rural integration, yet they often face fiscal constraints and inadequate public services. Policy innovation must ensure high-quality service delivery with limited resources.

Spatially, the “l(fā)iving circle” concept should guide development, concentrating superior public resources in county seats to build vibrant “15-minute community living circles”. Precise investment in education, healthcare and elderly care can enhance their appeal and population-aggregating capacity.

Financially, a diversified county-level fiscal system is urgent. This could include exploring special bonds for new urbanization to fund gap-filling infrastructure, and applying models such as eco-environment-oriented development. The eco-environment-oriented development model integrates public welfare projects with profitable related industries, seeking industrial returns to subsidize public services. A county seat’s competitiveness hinges on offering not only quality basic services but also distinctive local amenities.

Finally, the digital empowerment of governance would be managing smart spaces of “perception and response”. Digital technology is a force multiplier for spatial governance. The focus must shift from static data management to dynamic, intelligent response. The City Information Modeling platform should form the digital bedrock of smart cities, evolving beyond a 3D map into a “policy sandbox” for simulation and evaluation. Integrating the City Information Modeling platform with administrative approval, city management and emergency systems allows for predictive analysis — simulating a project’s impact on traffic or environment before construction — enabling scientific decision-making and avoiding waste.

Critically, digital tools must empower grassroots governance. Breaking down data silos among departments (housing, resources and public security) through unified standards and sharing mechanisms is essential. Furthermore, developing public digital participation platforms would allow citizens to become the city’s “sensors”, reporting issues and co-creating solutions. Such digital engagement embodies the “people-centered” ethos. While digital monitoring has a role, cultivating a widespread culture of rule-compliance and civic participation is foundational for the refined management modern cities require.

In general, the 15th Five-Year Plan period will be the key five years for China to basically realize socialist modernization. New urbanization and modernization of spatial governance are essentially a profound transformation of development models. From planning blueprints to governance reality, refined policy tools and institutional supply are needed. Whether it is optimizing governance structures, activating renewal momentum through benefit-sharing mechanisms, or empowering spatial perception through digital technology, the core direction is always “people-centered”. Only through institutional innovation and the development of a multilateral governance pattern led by the government, operated by the market, with the participation of society can cities truly become spatial carriers for high-quality life of the people, providing solid spatial support for Chinese modernization.

The author is a tenured associate professor at the School of Public Policy and Management at Tsinghua University.

The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.

Contact the editor at editor@chinawatch.cn.