The path forward has become clearer in recent years. The government must play a guiding role, even investing a portion of funds to leverage and mobilize market forces, while also incorporating public participation. This three-pronged approach of government, market and public engagement is essential to driving sustainable urban renewal, Dong said, adding: "For the market to get involved, a model that can generate modest returns for enterprises must be found."

Vice-Minister of Housing and Urban-Rural Development Qin Haixiang said: "China will cultivate a multifaceted investment and financing landscape, encourage the participation of business entities and establish a sustainable urban renewal model that is government-led, market-driven and publicly engaged."

In particular, China will channel more fiscal funds and explore innovative financing mechanisms to accelerate urban renewal projects, said the Ministry of Finance.

In April, the Ministry of Finance pledged central budget support for urban renewal initiatives in up to 20 cities over the course of this year, noting that priority will be given to mega and super large cities, as well as large cities along key river basins such as the Yellow River and the Pearl River.

Centrally administered municipalities, along with cities in the country's western regions, can each receive up to 1.2 billion yuan in subsidies for upgrade projects. Cities in central regions can obtain up to 1 billion yuan, while those in eastern regions can receive up to 800 million yuan.

"China will also expand the areas eligible for funding from local government special-purpose bonds and increase the use of these bonds as project capital, thus providing greater financial resources to support urban renewal initiatives," said Guo Fangming, director-general of the finance ministry's economic construction department.

The government will also leverage the catalytic role of policy-backed financial institutions. These institutions are encouraged to provide support for qualifying urban renewal projects, as long as the risk is manageable and the financial sustainability is ensured, Guo said.

In January this year, an executive meeting of the State Council said that urban renewal "serves as an important lever for the expansion of domestic demand".

China has made boosting domestic demand a top priority for its economic work agenda this year in the face of persistent global headwinds, while effective investment has emerged as a key driver to shore up demand and facilitate stable growth.

Underground plumbing and wiring, an important part of urban renewal initiatives, is expected to require a total investment of around 4 trillion yuan over the next five years, with an estimated 600,000 kilometers of aging gas, water and heating lines in need of upgrades, said the National Development and Reform Commission in late September.