01

Policy Background

Since After the special bonds for local government land reserves were halted in 2019, land reserve financing came to rely primarily on land transfer revenues and urban investment platforms. However, in recent years, the real estate market has undergone a profound adjustment, leading to a sharp decline in land transfer revenues. Coupled with the growing issue of idle and underutilized existing land, this has intensified fiscal pressures on local governments. In October 2024, the Ministry of Finance first proposed “allowing special bonds to be used for land reserves.” Subsequently, the Ministry of Natural Resources issued the “Notice on Using Funds from Local Government Special Bonds to Recover and Acquire Idle Existing Land” (Natural Resources Development [2024] No. 242), clearly outlining the operational framework. On March 11, 2025, the Ministry of Natural Resources and the Ministry of Finance jointly released the “Notice on Doing a Good Job in Using Local Government Special Bonds to Support Land Reserves” (Natural Resources Development [2025] No. 45), marking the official resumption of special bonds for land reserves—after a five-year suspension—and introducing, for the first time, a systematic and standardized approach to the acquisition and storage of idle existing land.

The core objective of this policy reboot is:

1. Resolving conflicts over existing idle land: As of In March 2025, the country announced plans to acquire and store over 300 parcels of idle land, with a total value of approximately 50 billion yuan, involving provinces such as Guangdong and Sichuan.

2. Stabilizing expectations in the real estate market: By revitalizing existing land reserves and optimizing the supply-demand structure, we can help stabilize and reverse the downward trend in the market.

3. Preventing Local Debt Risks: Strictly control the circulation of funds without real economic activity, emphasize self-balancing project revenues, and avoid creating new implicit debt.

02

Key Policy Points

(1) Bond Issuance Requirements and Entities Responsible for Fund Usage

Project access requirements:

It must be included in the land reserve plan and registered with an identification code in the national land asset management information system.

Prioritize the acquisition of underutilized land, including real estate plots that enterprises are unable to develop and real estate plots that have been allocated but remain undeveloped. Land supplied after November 7, 2024 will not be included in the scope of idle land. 。

Fund Management:

Special-purpose bond funds are earmarked and exclusively used by land reserve institutions listed in the registry, and are subject to closed-loop management. They may not be used for activities such as repeated buybacks that artificially inflate fiscal revenue.

(2) Optimization of the Application and Review Process

Project Selection Criteria: Priority should be given to projects with high maturity, significant expected returns, and low risks. Feasibility, compliance, and the balance of financing benefits must be thoroughly demonstrated.

Differentiated Management Between Pilot and Non-Pilot Areas:

1. In pilot regions adopting the “self-review and self-issuance” approach (such as Guangdong, Zhejiang, and 11 other provinces and cities, as well as the Xiong’an New Area), once a project is approved by the provincial government, it can issue bonds without further approval—only requiring filing.

2. Non-pilot regions must be reviewed by the Ministry of Finance and the Ministry of Natural Resources before being issued on a selective basis.

(3) Fund and Revenue Balancing Mechanism

Fund allocation shall be coordinated on a project-by-project basis: A single project may consist of multiple land parcels, and funds can be reallocated within the same project, provided that the overall project revenue is sufficient to cover both principal and interest on the debt.

Flexible Maturity Design: The bond maturity is not fixed; local areas can set it reasonably based on their assessment of supply and demand in the land market.

(4) Supervision and Risk Prevention

Dynamic Spot-Check Mechanism: In the third quarter of each year, provincial-level departments shall report on the use of special bonds from the previous year. The Ministry of Finance and the Ministry of Natural Resources will conduct random spot checks on key projects.

Strengthening principal responsibility: Local governments must be accountable for the authenticity of projects and are strictly prohibited from allowing funds to circulate without real economic activity or artificially inflating fiscal revenues.

03

Innovative Highlights: Policy Breakthroughs and Operational Optimization

For the first time, systematically standardizing the acquisition and storage of existing land: Clarify the criteria for defining idle land, the scope of acquisition, and the principles for re-supply, providing local authorities with operational guidelines.

Project Flexibility and Regional Differentiation: Allow fund reallocation within the same project, delegate authority to pilot regions, and guide resources toward areas with comparative advantages.

Dynamic Revenue Balancing Mechanism: Break through the limitations of individual land parcels and adopt a project-wide balancing approach to reduce the operational difficulties faced by local governments.

Strengthen full-cycle supervision: Implement closed-loop management across the entire process—from project review to fund utilization and repayment—to prevent debt risks.

04

Market Impact and Future Outlook

Short-term effect:

Accelerating the revitalization of existing land: Guangdong has already issued... The special bond issuance of 30.7 billion yuan has acquired 86 parcels of land, accounting for over 60% of the nation’s total planned land acquisitions.

Improving property developers’ liquidity: By acquiring and storing idle land, enterprises can unlock their accumulated assets and ease financial pressures.

Medium- and long-term significance:

Optimize the structure of land supply: Focus on high-quality plots in core cities and avoid inefficient expansion.

Promote a virtuous cycle in the real estate sector: Balance market supply and demand through a mechanism of acquisition, storage, and repeated supply, thereby stabilizing expectations regarding land prices.

Outlook: As Pilot regions adopting the “self-audit and self-issuance” approach are accelerating the pace of bond issuance (for example, Guangdong has already taken the lead). It is expected that the second quarter of 2025 will see a peak in the issuance of special-purpose bonds. According to data from the China Index Academy, the nationwide planned land acquisition and storage scale exceeds 50 billion yuan, and provinces such as Jilin and Jiangxi may soon follow suit.

Conclusion language

The resumption of this policy is not only an innovation in the land reserve financing mechanism, but also marks a shift in real estate regulation from... This marks a shift from “incremental expansion” to “optimizing existing stock.” Through the precise allocation and stringent oversight of special-purpose bonds, local governments are able to address existing contradictions while simultaneously injecting stable expectations into the real estate market. In the future, the effectiveness of these policies will hinge on the strength of local implementation and the speed with which the market responds. The practical experiences of leading provinces such as Guangdong could serve as an important reference for the entire country.