Core Viewpoint - The article discusses the significant changes in land acquisition behavior of urban investment companies (城投公司) in China, highlighting a sharp decline in their land purchases and the reasons behind this shift. Group 1: Changes in Land Acquisition - Urban investment companies have started to reduce their land acquisition activities after a period of aggressive purchasing, particularly in third and fourth-tier cities [3][5]. - In 2024, the land acquisition share of urban investment companies in 30 key cities reached a peak of 64%, but this has drastically changed in the first quarter, with their total land acquisition area dropping to under 20 million square meters, representing a significant decline to 50% [6][7]. - Major cities like Shenzhen and Guangzhou have seen urban investment companies retreat from land auctions, with Shenzhen's urban investment companies not acquiring any land in recent sales [11][12]. Group 2: Regional Variations - Jiangsu province has seen the highest land acquisition amounts by urban investment companies, with 10 out of the top 12 cities for land acquisition located there [17]. - In contrast, urban investment companies in Sichuan experienced a drop in land acquisition from over 100 billion yuan last year to only 8.2 billion yuan in the first quarter of this year, a decrease of over 30% [27][28]. Group 3: Operational Challenges - Urban investment companies face low operational efficiency, with the opening rate of acquired projects dropping from 48.9% in 2021 to just 8.5% in 2024, indicating a backlog of over 4,200 undeveloped plots totaling approximately 36 million square meters [30][33]. - The low opening and sales rates of urban investment companies, which were only 3.54% in 2023, contrast sharply with state-owned enterprises and private companies that maintain rates above 60% [34][35]. Group 4: Strategic Shifts - Urban investment companies are exploring new strategies to address their challenges, including utilizing special bonds for land acquisition and focusing on the development of rental housing [49][50]. - Some regions are implementing policies to limit land acquisition by urban investment companies, emphasizing the need for timely project development [62]. - The "Jiangsu model" is being adopted, where urban investment companies acquire second-hand homes for rental purposes, aiming to stimulate the housing market and improve local government funding efficiency [63][65]. Group 5: Future Directions - Urban investment companies have played a crucial role in urban development but must now adapt to changing demands and focus on enhancing existing stock rather than merely acquiring new land [69][72]. - The shift towards creating products that meet market needs and improving urban quality is essential for their long-term survival [73].