Ma Guangrong, Li Xunlei, Zhang Xiaojing and others speak out with the latest statements!

In recent years, the central government has repeatedly emphasized “optimizing incremental growth and revitalizing existing assets,” with improving resource allocation efficiency becoming an important lever for promoting high-quality development.

At the 116th China Macroeconomic Forum held on March 11, several experts pointed out that China has a large stock of assets. Currently, special attention should be paid to managing these assets, focusing on infrastructure, inefficient land, idle properties, and unsold commercial housing.

Experts also warned that revitalizing existing assets requires dispelling concerns among all parties and maintaining the core goal of improving long-term operational efficiency. They believe that optimizing incremental growth and revitalizing existing assets are “two sides of the same coin,” and coordinated efforts will promote continuous optimization of the economic structure and improve development quality and efficiency.

Current Stage Requires Special Attention to Stock Management

As early as the December 2023 Central Economic Work Conference, it was emphasized: “We must coordinate the relationship between optimizing incremental growth and revitalizing existing assets, and comprehensively improve resource allocation efficiency.” The 2025 Central Economic Work Conference and the 2026 Government Work Report also called for “continuing to expand domestic demand, optimize supply, optimize incremental growth, and revitalize existing assets.”

Experts generally agree that the current stage requires extra focus on stock management. Zhang Xiaojing, director of the National Finance and Development Laboratory, stated that since the laboratory began systematic research on the national balance sheet in 2011, over a decade of data shows that China’s stock of assets is enormous. China’s total stock economy has gradually caught up with the U.S., and in some years even surpassed it. This is a significant change, indicating that the stock of resources is very large and further underscores the necessity of tapping into this potential.

Ma Guangrong, deputy dean of the School of Finance and Financial Studies at Renmin University of China and a key member of the China Macroeconomic Forum (CMF), summarized that key areas for revitalization include existing infrastructure, inefficient land, idle properties on these lands, and unsold commercial housing during recent real estate market adjustments. Many of these assets, if owned by government or state-owned enterprises, involve a large number of ownership entities.

Specifically, stock infrastructure includes government cultural venues, bridges, related transportation facilities, underutilized government office buildings, and former industrial land occupied by state-owned enterprises in city centers. These assets are vast, and market-based revitalization potential is urgent to unlock.

Zhang Xiaojing believes that idle, inefficient, and dormant assets include: land approved but unused, land used but not fully utilized; vacant government buildings, stagnant industrial parks, and delayed projects; overbuilt infrastructure, idle public facilities, assets occupied by zombie enterprises; and public utility facilities with low returns and rough operations.

Mao Zhenhua, co-director of the Institute of Economics at Renmin University of China, pointed out that revitalizing real estate resources involves not only residential properties but also a large number of commercial buildings, office towers, headquarters bases, and development zones. Structural contradictions at the industrial level are also prominent. Strengthening anti-involution policies, optimizing industrial structure, regulating market competition, fostering a healthy development ecosystem, promoting market-oriented mergers and acquisitions, establishing a survival-of-the-fittest mechanism, and enabling leading enterprises to achieve scale effects through resource integration are essential. Accelerating the natural clearance of outdated capacity and continuously improving the corporate bankruptcy system are also necessary.

Addressing Concerns of Participants and Preventing Improper Operations

Revitalizing existing assets involves multiple stakeholders, including government departments, private enterprises, and market investors. Concerns among these parties can hinder progress. Experts proposed solutions tailored to different stakeholders.

To address the limited initiative of government departments, Ma Guangrong pointed out that government assets are scattered across various departments. If revenue from revitalization is included in the fiscal budget, individual departments lack strong motivation to activate their assets. Asset revitalization requires active cooperation among multiple departments; relying on a single department is insufficient.

Zhang Xiaojing suggested encouraging exploration and implementing the “three distinctions”—distinguishing between different types of assets, ownership, and operational modes—based on reform principles and the national interest, tolerating some shortcomings during the process. This approach aims to dispel concerns about accountability and the risk of state asset loss.

In practice, some localities and sectors may face new risks during asset revitalization. Several experts issued warnings.

Ma Guangrong noted that, according to team research, 70% of local government assets sold are purchased and taken over by local urban investment companies, with few private or external investors involved. The capacity of these local urban investment companies to revitalize and operate these assets is a major challenge.

He further explained that, based on public reports, some local urban investment companies acquire assets through borrowing or by using government assets as collateral to obtain loans, leveraging their positions. Only those with sufficient operational capacity and ability to increase project returns can truly revitalize these assets. Otherwise, borrowing from financial institutions could lead to repayment difficulties and potential financial risks.

Zhang Xiaojing also noted that many regions are exploring financial tools such as REITs to promote asset revitalization. However, these are not the core methods. Financialization helps improve liquidity initially but the fundamental goal is to enhance long-term operational efficiency and genuine returns, shifting from a financing-driven model to an operational enhancement model, thereby improving the quality and efficiency of state assets to serve national strategies and public interests.

Additionally, Ma Guangrong warned against the inefficiency caused by rigid public service pricing mechanisms. If infrastructure service prices remain too low and inflexible, it becomes difficult to revitalize these assets because they cannot generate substantial income. He also cautioned against the “packaging” of special bond projects, which may lead to insufficient returns.

Balancing Optimization of Incremental Growth and Revitalization of Existing Assets

Efficiently revitalizing existing resources, capital, and industries not only improves resource allocation but also provides continuous momentum for new growth points. Proper coordination between optimizing incremental growth and revitalizing existing assets is crucial for achieving optimal resource allocation across society and promoting high-quality economic development.

Ma Guangrong emphasized that balancing these two aspects has a threefold significance: optimizing supply, expanding domestic demand, and preventing risks. They are “two sides of the same coin.” Revitalizing existing assets helps improve resource allocation efficiency during incremental growth. The process itself requires additional investments (such as technological upgrades), which can also expand domestic demand. Furthermore, revitalization involves optimizing the debt structure of existing assets, such as lowering interest rates and adjusting maturities, to prevent potential economic and financial risks. Only through coordinated efforts can these strategies jointly promote economic restructuring.

Mao Zhenhua suggested overcoming path dependence by establishing a new resource allocation model centered on stock adjustment. Policies should have strong measures for revitalizing and adjusting existing assets, while incremental growth should be driven from both supply and demand sides. Seizing opportunities like enterprises going global can organically combine asset revitalization with incremental optimization, considering these within broader reform initiatives and leveraging market mechanisms to create new opportunities.

Julian Zhu, Vice Dean of China Europe International Business School, noted that although revitalizing existing assets and optimizing incremental growth are supply-side concepts, they are highly related to demand. Revitalization can increase fiscal revenue and expenditure capacity, while improving resource returns through incremental growth can lay the foundation for sustainable debt issuance. Their combined efforts can further boost demand, enhance resource utilization efficiency, and strengthen debt sustainability.

Li Xunlei, Chief Economist at CITIC Securities, proposed four approaches: First, addressing excessive local government debt and heavy interest burdens by issuing special bonds from the central government to replace local debt at lower financing costs; second, market-based revitalization of state equity and assets through reasonable constraints; third, expanding investment channels, encouraging household consumption, and developing high-end and service consumption amid insufficient domestic demand and large household savings; fourth, advancing fiscal and tax reforms, redistributing national income, and improving factor market mobility through a unified national market, including structural adjustments to local fiscal transfers to address social security gaps and support impoverished groups.

Layout: Liu Junyu

Proofreading: Liao Shengchao