(PGMM [2022] No.4, November 15, 2022, and revised on

February 8, 2024)

Section 1    [Purpose and Basis]

The Procedures of the Pudong New Area on Implementing the General Allocation of Resource Credits for Construction Projects (these “Procedures”) are formulated to enhance resource utilization efficiency in construction projects, promote economic development, and advance ecological civilization in the Pudong New Area, pursuant to the Opinions of the Communist Party of China Central Committee and State Council on Supporting the High- level Reform and Opening-up to Establish a Pilot Area for Modern Socialism in the Pudong New Area and the Decision of the Shanghai Municipal People’s Congress Standing Committee on Formulating Regulations to Improve Law-based Safeguards for High-level Reform and Opening-up in the Pudong New Area, and other applicable provisions, and in light of the actual circumstances in the Pudong New Area.

Section 2    [Applicable Scope]

These Procedures shall apply to the general allocation of resource credits for construction projects in the Pudong New Area, including activities related to regulation and support.

“Resource credits” in these Procedures include land credits (including land credits for new construction and mitigation credits for the use and restoration of arable land), housing credits for expropriation and resettlement, water system mitigation credits, green area mitigation credits, and forest land mitigation credits. 

Section 3    [General Requirements]

Resource credit allocation shall be managed through an integrated government approach following the principles of capacity control, differentiation of use and restoration, and dynamic equilibrium. This approach shall firmly uphold ecological and environmental thresholds, facilitate systemic innovations, streamline process redesign, and the transition from internal procurement by construction companies to centralized management by the appropriate department through credit administration policies and the creation of appropriate active reserves to form a cohesive operational environment blending ecology, environment, natural resources, and construction projects.

Strategic cycles for allocating resource credits shall be determined through discussions with competent municipal authorities led by the Pudong New Area People’s Government.

Section 4    [Projects Subject to General Allocation]

Construction projects subject to general resource credit allocation include:

(1) major infrastructure projects such as those for energy, transportation, and water conservation;

(2) major public service initiatives in fields such as science and technology, culture, education, health, sports, environmental, and ecological protection;

(3) affordable housing developments;

(4) land reserve projects carried out by the Pudong New Area People’s Government; and

(5) other construction projects designated by the Pudong New Area People’s Government. 

Section 5    [Assignment of Responsibilities]

The Municipal People’s Government shall commission the Pudong New Area People’s Government to take charge of reviewing the filling and blocking of any watercourses.

The district planning and resources department shall administer land credits for construction projects, including but not limited to planning, reserves, allocation, and review requests within the district.

The district ecology and environment department shall administer the planning, reserves, and allocation of mitigation credits for water systems, green areas, and forest land within the district, and review watercourse filling and blocking requests in construction projects, as well as review green area and forest land mitigation credit requests with the authorization of the municipal landscaping and city appearance administration.

The district housing department shall take charge of general housing planning, reserves, and allocation within the district, among others.

The district development and reform department and the finance department shall integrate comprehensive planning projects for new resource credits into the Pudong New Area People’s Government’s annual and primary construction project investments pursuant to national socioeconomic development planning.

Township governments shall cooperate with the district resource credit planning and allocation department to facilitate the organization and allocation of resource credits for projects within their jurisdictions.

Section 6    [Multi-department Coordination Group]

The Pudong New Area People’s Government is to establish a multi-department coordination group for the comprehensive management of resource credits to analyze and address major issues in the allocation of resource credits. A coordination group office is to be set up within the district’s major project management headquarters, which takes charge of the routine work carried out by the multi-department coordination group.

Section 7    [Preparing Demand Plans]

Developers shall prepare five-year, three-year update, and annual resource credit demand plans pursuant to district economic and social development planning, to support the effective allocation and realization of credits.

Section 8    [Integrated Planning of Credits]

A full process management platform (the “integrated platform”) for construction projects in the Pudong New Area is to be created to facilitate consultation, request, report, oversight, and assessment processes, as well as the comprehensive planning of resource credits, among others, ensuring dynamic integration of planning, projects, and schemes.

The district resource credit planning and allocation department shall allocate the necessary credits based on reports received through the integrated platform as needed by actual projects.

Section 9    [Comprehensive Planning of Land Credits]

The district planning and resources department shall create a comprehensive plan for land credits based on the overall territorial space management plan, implementing aggregate control over the comprehensive planning period and ensuring that the amount of permanent basic farmland remains unchanged, its quality improves, and its layout is optimized.

In support of comprehensive land consolidation efforts, development of high-quality farmland, reduction of construction land, and general consolidation and reclamation, the district planning and resources department shall continue to create designated zones for permanent basic farmland. If the location of a construction project overlaps with arable land protection areas, a land consolidation plan shall be prepared to maintain a balance between quantity and quality, with adjustments documented on the municipal urban spatial information platform.

During the final year of the planning cycle, the district planning and resources department shall assess the total demand for land credits for the forthcoming period and submit this department to the municipal planning and resources department.

Section 10    [Comprehensive Planning for Expropriation and Resettlement Credits]

The district housing department shall set up housing reserves for expropriation and resettlement, allocating credits based on the actual needs of developers.

Section 11    [Comprehensive Planning  of Filled and Blocked Watercourse System Mitigation Credits]

The district ecology and environment department and the district development and reform

department shall formulate and implement district and township-level plans for watercourse reserves and construction to establish river and lake area resource reserves within the district, and guide township governments in watercourse development, which uses river and lake areas in town-level projects and incorporates any surplus space into the district reserves for river and lake resources.

Mitigation and compensation for the water systems used by construction projects shall conform to district flood control safety and water quality standards, ensuring only increases, not decreases, in river and lake areas within the district throughout the planning period. When filling or blocking non-planned watercourses with flood control features, construction projects shall preserve the integrity of the existing water network and not affect its flood control capabilities.

All watercourses filled or blocked during a project shall generally be compensated. Developers shall be required to incorporate space within the air space and thirty meters both upstream and downstream into construction plans for newly constructed, modified, or expanded bridge projects upon approval. They shall select sites and begin construction at the same time based on the watercourse plans. Adjustments may need to be made every thirty meters upstream and downstream to align with conditions in the surrounding water network; river and lake areas affected by filled or blocked watercourses shall also be compensated. Housing projects shall, where feasible, include landscape plans that prioritize the inclusion of rivers and lakes within project boundaries, using the necessary water credits during the planning phase.

Section 12    [Comprehensive Planning of Green Area Mitigation Credits]

The district ecology and environment department and the district development and reform department shall plan and implement compensation projects for green areas to establish green area reserves within the district.

The district ecology and environment department shall take charge of organizing district and town-level green area compensation projects based on the plan, ensuring that newly compensated areas match or exceed the areas impacted by green area mitigation within the allocation period.

Construction projects shall, in principle, balance the use of green areas with their restoration. Projects that fail to achieve the required green area ratio or equivalent compensated green area shall be subject to fees for green space relocation or supplement. Any portions of new or reconstructed projects exceeding the legally required green space ratios are to be added to the district green area reserve and shall not result in a reduction of green areas following their addition.

Housing development projects, including but not limited to those for school, hospital, and industrial park developments, are encouraged to increase green space through methods such as vertical and rooftop gardening, provided these approaches meet applicable technical standards.

Section 13    [Comprehensive Planning of Forest Land Mitigation Credits]

The district ecology and environment department shall, together with other appropriate departments, draft and implement reserve and construction plans for forest compensation projects based on developer forestry needs, and establish a district forest land reserve.

Following afforestation guidelines, the district ecology and environment department shall guide and arrange developers in supplementing forest land, ensuring that the compensated area matches or exceeds the area of forest cover impacted within the planning period.

New roads within project boundaries that surpass the legally required green space ratio and meet forest standards may contribute to forest land compensation; areas within watercourse control zones that meet forest land criteria may contribute to forest land compensation.

Land outside urban development boundaries designated for land reserves or other unused land may be used for forest compensation once approved by the district planning and resources department. Land designated by the district land reserve department or township governments for forest compensation, and verified by the district ecology and environment department and the appropriate agencies, shall retain its original ownership status.

Compensated forest land within a township may be taken into account in the annual evaluation of the township government’s forest land development performance.

Section 14    [Allocation of Land Credits]

After acquiring property rights assessment reports, developers may request land credits. The district planning and resources department shall provide preliminary opinions on planning credits within ten business days of receiving a request and complete the review and approval process for converting agricultural land within thirty days of receiving the necessary documentation.

Section 15    [Allocation of Expropriation and Resettlement Housing Credits]

During the project reserve phase, developers may verify land ownership boundaries and initiate preliminary reviews on expropriation with the district housing expropriation department, which shall complete these preliminary investigations within thirty days of receiving the request. Based on the results of the review, developers may submit a request to the district housing department, which manages resources for expropriation and resettlement, and the district housing department shall issue its initial opinions on the comprehensive planning within ten business days.

During project implementation, the district housing expropriation department shall finalize housing reviews and confirmations within the designated period following the public notice of expropriation for construction projects. Developers shall then apply to the district housing department for distribution of housing in exchange for taken properties based on survey results, appropriate housing type matching, and allocation plan. The district housing department shall then be responsible for allocating the final expropriation and resettlement credits within ten business days.

Section 16    [Allocation of Mitigation Credits for Watercourse System Filling and Blocking]

During the project reserve phase, developers shall negotiate water system compensation with the district ecology and environment department following initial watercourse filling and blocking reviews, with the district ecology and environment department providing preliminary allocation opinions within twenty days.

During project implementation, developers shall entrust professional organizations to prepare demonstration plans for watercourse filling and blocking based on initial allocation opinions, and consult the district ecology and environment department for further guidance. The district ecology and environment department shall provide allocation opinions within ten business days, which shall include details such as the watercourse name, areas to be compensated, and project implementation plan. These allocation opinions may serve as the basis for preparing preliminary budget estimates.

Upon approval of construction project feasibility studies, developers may submit a request for watercourse filling and blocking to the district ecology and environment department via the integrated online government service platform, with the district ecology and environment department completing the review within ten business days.

Section 17    [Allocation of Mitigation Credits for Green and Forested Areas]

During the project reserve phase, developers shall negotiate the mitigation and compensation of green and forested areas with the district ecology and environment department following initial site reviews, with the department assessing the nature of the impacted green areas and forest lands and providing preliminary allocation opinions within twenty days. Compensation for construction projects impacting designated green or forested areas must occur outside of these designated areas.

During project implementation, developers may submit a request for green and forest area mitigation and compensation credits based on initial allocation opinions to the district ecology and environment department, which shall issue its allocation opinions within ten business days.

Upon approval of a construction project, developers may submit a request for the use of green and forested areas to the district ecology and environment department via the integrated online government service platform, and the district ecology and environment department shall issue their decision within seven business days.

Section 18    [Regulation During and After Project Development]

The district resource credit planning and allocation department shall improve regulation both during and after project development such as converting agricultural land to construction land, filling and blocking watercourses, and using green and forest lands, as well as expropriation and resettlement housing.

District urban management and law enforcement departments, sub-district offices, and township governments shall increase regular enforcement inspections and enforce regulations against the unauthorized use of land for construction projects, watercourse dredge and fill, and the use of green and forested areas.

Section 19    [Developer Responsibilities]

Developers shall increase research and reviews during project planning and implementation phases, encourage the rational use of resource credits within projects through optimized plans, minimize the unauthorized use of the resource credits, and report resource credit needs and planning details pursuant to the district resource credit planning and allocation department’s requirements.

Section 20    [Risk Prevention and Control Process]

The district resource credit planning and allocation department shall enforce strict compliance with ecological protection redlines and regulate resource credit planning and allocation, among others. Resource credit planning and allocation are to be included in audits of natural resource asset administration in connection with leadership transitions.

The district resource credit planning and allocation department shall carry out annual and ongoing monitoring and evaluation of resource mitigation credits during the planning period, reporting the results of such evaluations to the district multi-department coordination group. The district multi-department coordination group shall adjust reserve and development plans for district resource credits and permanent basic farmland based on evaluation results and actual needs.

If the district resource credit planning and allocation department identifies significant risks within the resource reserves, it shall promptly report to the district multi-department coordination group for a decision and adjust or terminate the project development plan or construction as necessary.

Section 21    [Incorporating Performance Evaluations]

The Pudong New Area People’s Government shall conduct follow-up oversight and assessments on the district resource credit planning and allocation department’s resource credit planning administration and allocation efficiency, as well as the township government’s enforcement, incorporating the assessment results into their annual performance evaluation

Section 22    [Financial Provisions]

The district development and reform department and the finance department shall cooperate to secure financial support for the construction project resource credit reserve.

Watercourse compensation costs for financial development projects within the region are included in the district’s preliminary financial development project budgets. Preliminary expenses and construction costs for district and town-level watercourse developments to facilitate investment in other water system compensation projects shall be borne by the appropriate entities based on the investment process.

Preliminary expenses and construction costs for green area compensation related to construction projects are included in the construction projects’ preliminary budget estimates.

Similar preliminary expenses and construction costs for forest land compensation shall be included in the preliminary construction project budget estimates, with ongoing management and land transition costs for forest land relocation subject to the applicable forestry management regulations issued by the district ecology and environment department.

Section 23    [Validity Period]

These Procedures shall take effect from March 1, 2024, and remain valid until December 14, 2027.