Li Keqiang to focus on smart and green urbanisation

Investors banking on a big-bang building programme as part of Premier Li Keqiang's centrepiece urbanisation programme may be in for a major disappointment.

In the past two days, top policymakers, including Li, have used major public speeches to temper expectations that a massive new wave of construction-led initiatives will be the cornerstone of the policy plan.

The emphasis has, instead, been on urban connectivity, productivity and efficiency, suggesting Beijing's focus is on soothing social tensions that 30 years of breakneck industrial development and urbanisation have brought, rather than stoking them with more construction.

Chinese leaders must show "a clear shift" from the old urbanisation model featuring massive fixed-asset investment in the past decade, said Laurence Brahm, an international lawyer and an economic consultant.

The investment-driven approach had led to "enormous distortions in the economy and great inefficiencies as well as threatening the water security of the country", said Brahm. Policymakers have "definitely" realised the urgency to change and "the challenge would be to execute it", he said.

In a speech at the World Economic Forum, Li emphasised that any future growth must be "made on the premise of higher quality and efficiency", though he did not elaborate on the much-anticipated urbanisation blueprint still being drafted.