Launch green buildings to revitalize economic growth

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Report on China’s Strategic Approach to Innovation in Green Building Development By Wu Jiandong, chief economist of this newspaper. ★At present, various measures aimed at boosting domestic demand in China are being implemented, but they are mostly carried out in traditional ways. To address international crises, we cannot rely solely on guerrilla warfare and mobile warfare; instead, we must depend on large-scale battles involving entire armies. ★The author proposes for the first time the idea of transforming China’s 54 billion square meters of existing and newly built buildings into green buildings in phases. This approach puts forward the strategic notion of using green buildings to revitalize China, thereby accelerating the advancement of the country’s real estate industry to the forefront of global technological innovation. It also facilitates the clustered transformation of industries related to real estate through a step-by-step approach, creating new strategic pathways to sustain China’s rapid economic growth. The author proposes for the first time a strategic initiative to renovate 4 billion square meters of old, dilapidated buildings within three to five years; this represents an innovative consumption theory based on integrated consumption, and such a form of consumption should serve as the main transitional mechanism for China’s shift from a production-oriented society to a consumption-oriented one. ——――――――Editor ★★★ Seizing Opportunities in Crisis: The United States Takes the Lead in Pushing for Energy-Efficient Building Reforms ★ On January 25, 2009, the latest \"Economic Recovery Plan Progress Report\" released by the White House emphasized the need to renovate 2 million residential homes and 75% of federal buildings over the coming years in order to improve their energy efficiency. It shows that amid the numerous challenges associated with reconstruction during this crisis, there are many issues to address in the United States. Yet Obama still chose the transformation of the green building industry as one of the key aspects of reviving the American economy, hoping that this industry would unleash its historic potential and become a driving force in rebuilding America. For the United States, homes are not just financial products that require credit support ； Housing is also the essence of the energy and materials industries, and it needs to be transformed and upgraded ； Housing is the nexus where energy, climate, and environmental systems interact, determining the basic patterns of production and lifestyle for humanity in the future. Therefore, whoever seizes the green building revolution will lead the transformation of the global energy industry, take the lead in the world, and gain control over the trends and business opportunities associated with the renovation and repair of 300 billion square meters of buildings worldwide. ★Thus, the major energy transition will become the driving force behind America’s current economic revival, and the transformation of energy-efficient buildings has become an important part of America’s new energy industry revolution. Under the impact of the crisis, China also chose the energy industry and the real estate sector as key areas to stimulate domestic demand. However, to date, China’s economic transformation has not made major energy transitions its core industry, nor has it treated green building as a new technological revolution to pursue, let alone aimed to become a leader in innovation. This could cause us to miss a historic opportunity to lead the global new technology revolution. ★Moreover, if we do not carefully study the latest developments in international industrial changes, our current efforts to revitalize and reform the industry are likely to deviate from the path of innovation driven by the global new industrial revolution, or even move in the opposite direction, resulting in even greater losses for China as a whole. In other words, the two major powers, China and the United States, adopted different asynchronous strategies in the transition strategy for this crisis; the essence of these differing strategies lies in the fact that China and the U.S. are pursuing different **competitive strategies and different paths to growth** in the future global division of labor. However, such a second-rate, delayed strategy could place us in an unsatisfactory position within the new international division of labor. ★At present, measures aimed at boosting China’s domestic demand – such as consumer vouchers, programs to bring home appliances to rural areas, tax cuts, dividends, rent collection, and improvements to the social security system – are being implemented in a gradual manner. These measures rely primarily on traditional forces to address issues related to crisis recovery and reconstruction. However, to address crises, China cannot rely solely on guerrilla and mobile warfare; it must also depend on large-scale battles involving entire armies. At present, China must immediately embark on a major transformation and pursue large-scale efforts to expand domestic demand, in order to establish a highly dynamic framework for domestic consumption; developing green buildings represents the ideal platform for fostering such consumption. ★Therefore, the view that overemphasizing economic structural adjustment means restricting fixed-asset investment and real estate investment is incorrect ； But repeating traditional production methods to expand real estate investment is also wrong. The financial crisis has provided us with a rare historical opportunity to develop green building innovations in order to transform the traditional real estate industry. Such a transformation can not only elevate China’s real estate sector to the highest standards of contemporary world architecture but also drive the cluster-based transformation of industries related to real estate, thereby fostering innovative changes that will remain competitive over the course of a century. Therefore, focusing on the real estate industry represents an ideal starting point for any economic upgrading and transformation in China, with marketization being the fundamental approach to achieving this. ★According to calculations, since 2009, by developing green buildings, China has been able to create a massive consumer market worth around one to two trillion yuan per year. The existing production systems in China can be utilized to produce the goods associated with this increased demand, and this can drive economic growth by more than 3 percentage points. This represents a valuable tool for China’s economic development, and it is possible that China will be able to maintain such rapid growth driven by transformation over the next 5 years. To this end, it is necessary to overturn some of our outdated concepts, accelerate research, and advance the grand strategy for the leapfrog, cross-industry development of green buildings in China, in order to recreate China’s driving force for growth. ★In fact, China has a much larger market for the green building revolution than the United States. Taking the heating management market as an example alone, by the end of 2008, China had nearly 7 billion square meters of buildings served by centralized heating systems. The average energy consumption, expressed in terms of standard coal, was around 20 kilograms per square meter per year. If a new system of individual heating metering is implemented, it is estimated that more than 100 million tons of coal can be saved each year for heating purposes, along with over 100 million tons of carbon dioxide emissions reduced. This would result in cost savings of over 100 billion yuan per year. If more than 1 trillion yuan is invested in completely transforming China’s heating systems to make them more energy-efficient, satisfactory returns can be achieved in about 10 years. At present, China’s foreign exchange reserves agencies are seeking ideal investment opportunities around the world; in fact, the best investment opportunities can be found right here at home. Moreover, once this huge demand and market for green buildings is awakened, it will give us the **opportunity to undertake the world’s largest green revolution; we have no reason to let the revolution in energy efficiency in Chinese architecture remain dormant. ★★★There is no alternative: Green buildings represent a strategic pathway to unlocking China’s domestic demand. ★ Among all the industries in our country, the one with the fastest degree of commercialization, the largest scale, the highest existing value, the longest industrial chain, the greatest impact on the national economy, the biggest direct contribution to local finances, the closest connection to people’s daily lives, a higher degree of isolation from the international economic system and a stronger regional character, as well as the greatest ability to drive GDP growth, is the real estate industry. Without the vigorous development of the real estate industry, China cannot overcome this economic crisis ； Without implementing an upgrading transformation strategy within the next 3 years, it will be difficult for the real estate industry to achieve significant development. Therefore, innovation is the only fundamental path for the development of the real estate industry. ★According to the statistical reports on rural and township development in recent years as well as relevant data from the **Statistics Bureau, by the end of 2008 we estimated that the total floor area of buildings in urban areas and rural towns and villages in mainland China had reached over 53 billion square meters, of which the floor area of buildings in rural towns and villages was around 34 billion square meters, with residential buildings accounting for approximately 27 billion square meters ； The floor area of urban housing is nearly 20 billion square meters. This system currently integrates the main manufacturing capabilities of China’s industry, as well as reflecting the primary ways of living and surviving of the Chinese nation. Transforming China’s newly built and existing buildings into green buildings in phases will bring about a dramatic upgrade in this industry. This represents the optimal approach for establishing the core framework of China’s domestic demand system, and it will also give rise to China’s most promising industry, driving rapid economic growth in the next 10 years. ★The financial crisis has provided us with a rare historical opportunity to develop green buildings as a way to innovate and transform the traditional real estate industry. China has no choice but to advance the development of green buildings on a large scale, and we should start this effort as soon as possible and in an orderly manner in 2009. China, which has the largest housing area in the world, should also become the largest market for green buildings globally. Our estimates suggest that over the next 10 years, the scale of renovations related to green buildings in China will exceed 30 trillion yuan. The market-driven development of this sector will not only surely become one of the most important areas of reform in China but will also become one of the most popular consumer trends among the Chinese people. ★★★The power of leverage: Building green buildings in China ★★ A breakthrough for clustered development ★ In 2008, the carbon dioxide concentration in the atmosphere exceeded 400 ppm, and catastrophic weather events are becoming increasingly frequent. Developed countries are imposing higher and higher requirements regarding energy efficiency in buildings; as a result, green buildings are set to become the trend in building development. Therefore, I believe that although green building is currently mainly a concept without a systematic framework, it urgently needs to be quantified and regulated by law. Moreover, green buildings are not necessarily expensive buildings, nor are they simply buildings that rely on high technology. Green buildings currently include various forms such as eco-friendly buildings, sustainable development buildings, and energy-saving buildings. They refer to healthy living environments created by making full use of natural resources, human efforts, and technological innovations, with the goal of achieving harmonious development among people, buildings, and the environment. Green buildings have existed since ancient times, and the frequent occurrence of environmental disasters makes it even more necessary to have such buildings in the future! ★Considering the actual operation of construction projects in China, if the construction cost per square meter of existing buildings increases by 20% to 50%, then by mandatorily promoting energy-saving films, insulation materials, fresh air systems, waterproofing materials, moisture-proof materials, soundproofing materials, exterior wall materials, building metal technologies, adhesive building materials, as well as technologies and materials for temperature control, humidity control, sewage treatment, wastewater treatment, rainwater management, and solar power generation, it is possible to facilitate the gradual transformation of urban housing in China into world-class energy-efficient and environmentally friendly buildings. Moreover, this additional cost can be covered within the development potential of China’s real estate industry. ★There are three main approaches to achieving this strategic transformation, one of which is to leverage the development of rural housing ； The second approach is to advance on a large scale by utilizing the renovation and replacement of old, dilapidated buildings in towns ； The third is to promote it through new construction projects. The former lacks sufficient comprehensive support factors, while the latter is hindered by favorable economic conditions. Making the reconstruction of old and dilapidated buildings in towns the main driver for this transformation, thereby promoting the upgrading and innovation of new buildings as well as those in rural areas, is the most appropriate approach. Moreover, such imperfect buildings will eventually be renovated, so this represents the ideal opportunity for transformation at present. It makes it even more necessary for us to re-understand Archimedes’ law of levers; he said, “Give me a fulcrum and I can lift the Earth.” ”In other words, it is possible to use the least amount of effort – such as the green transformation of old, dilapidated buildings – to drive much larger-scale changes, such as the renovation of 50 billion square meters of buildings in China, toward an innovative structural model of transformation. This requires us to adhere to the standards of green building, seek scientific approaches, and leverage small actions to trigger overall development. ★We are aware that there are current issues with building design in the urban centers across the country: the seismic resistance of buildings does not meet reasonable standards, the overall or partial quality of these buildings is inadequate, they consume a large amount of energy, and there is a significant area of old and dilapidated buildings that are over 30 to 40 years old, or even those that already have serious problems after just 10 to 20 years of use. The total area of such buildings exceeds 4 billion square meters. These properties will be the focus of large-scale renovation and repair efforts over the next 10 years. This represents both a consequence of historical factors and a necessary correction to the existing model of building development in China. It should also serve as the main area for the development of green buildings in China in the 21st century, as well as a pilot project for such developments. ★As of January 2009, the total construction area of commercial housing in urban areas was approximately 2.5 billion square meters, of which nearly 800 million square meters were under construction, about 300 million square meters had been completed, and the current amount of vacant housing was over 400 million square meters. The real estate industry is a key sector that drives rapid growth of the national economy, and it also serves as the fundamental basis for addressing the decentralization of fiscal powers between the central and local governments. If the area of housing sold declined sharply from 2009 to 2011, it would directly affect the growth rate of the national economy and local government revenues. To this end, sales efforts should be intensified for projects that are already in progress. At the same time, we must proactively create a large number of projects to renovate old and dilapidated buildings, in order to drive a strategic transformation in the real estate industry and mitigate the overall risks facing it over the next three to five years. We believe that it will be difficult to counter the risks of subsequent impacts from this crisis without launching green building renovation projects for old dilapidated houses. ★★★Adopt special measures: Create policies to support the development of green buildings in China. ★Reform has led to a unique pricing system for urban assets, and it also provides the opportunity to make use of the leverage effects associated with this asset structure to achieve significant outcomes; in other words, it is possible to facilitate the transition toward green building development by adjusting land price revenues. To this end, land prices determine the level of welfare for the people; they can also be used to initiate reforms with low investment in order to address the shortcomings in domestic demand. ★If we aim to upgrade old, dilapidated buildings with **minimal costs, relying primarily on voluntary investment from society and property owners, then it is necessary to make optimal use of our existing resources for allocation and adjustment. At the same time, it is important to strike a balance among various economic goals such as large-scale fixed asset investment in crisis reconstruction, economic transformation and advancement, the commodification of housing, sharing of investment costs, maintaining local fiscal revenues and healthy economic operations, and fostering rapid growth in emerging industries. This will enable us to transform our current real estate industry into one that operates at a high level, driven by innovative technologies. In this regard, we believe it is entirely possible; the key points of the recommendation are as follows. ★★Firstly, policy support: With existing home owners guaranteed by law to be relocated on a collective basis while maintaining their original floor area, special policies that **increase the floor area ratio by 1–2 times (for special types of buildings, the floor area ratio can be adjusted to 0.3%–3%) are employed. Under unified planning and coordinated management at the local level, investors are brought in to launch large-scale programs for the joint development of old and dilapidated buildings. ★In the next 3 years starting from 2009, around 500 million to 1 billion square meters can be renovated each year; this economic revitalization plan **does not involve any investment**. However, it means that **by increasing the floor area ratio and development rights by 1 to 2 billion square meters, it is possible to accelerate the renovation of around 1 billion square meters of old buildings each year, while simultaneously maintaining the progress of housing commercialization in China. ★★Secondly, the mode of operation: The development of such housing can take various forms, including joint construction by property owners, cooperative building by society, construction by developers, or construction through trust arrangements. ★★Thirdly, commencement and completion management: Under the joint development plan for old and dilapidated buildings, in addition to meeting other requirements for commencement, 70% of the new area must be pre-sold at the time of commencement, and a deadline for completion must be set to ensure that sales of the main structure take place within the same year; otherwise, a vacancy tax and related fines shall be imposed. ★To encourage investment and construction during times of crisis, a deadline can be set for this special policy. Once the favorable conditions expire, such programs for renovating old dilapidated buildings may no longer be in effect, and renovation projects for old buildings can gradually return to following the established plans. Such a countdown management system can motivate society to accelerate the pace of renovating old buildings. ★★Fourth, the nature of the buildings and land transfer fees: For the additional area created under the old dilapidated building redevelopment program, land transfer fees and other taxes must be paid in accordance with local standards, and local authorities should establish specialized agencies to collect these fees, thereby maximizing administrative efficiency. The nature of such housing should, in theory, be commercial housing; housing for special groups can be subsidized housing or housing with restricted prices and locations. The land transfer fees can also be paid in installments depending on local conditions, and the joint development program for old and dilapidated buildings should continue to promote the growth of China’s real estate industry. ★★Fifthly, construction goals related to energy conservation and environmental protection: Projects under the joint development plan for old and dilapidated buildings must adhere to the newly established standards set by the Ministry of Construction in terms of energy efficiency, environmental protection, as well as building quality and structure. Energy-efficient and environmentally friendly materials must be used, and energy-saving and environmentally sound building designs must be implemented. Advanced facilities such as electronic sensors should be widely adopted, with the aim of achieving a 30% or greater increase in energy savings in the use of such properties compared to ordinary residences. Installing electronic switches in existing houses and implementing energy-saving metering on a household basis can also save around 1/4 of the heating costs, and this reform can be further expanded. ★If green buildings are developed using the methods outlined above, their strategic benefits are obvious: they can effectively increase the value of land use rights by raising the floor area ratio ； Quickly resolve the market-based operation issues in current large-scale urban development ； Resolve social conflicts arising from long-distance relocations through models such as on-site demolition, nearby relocation, and reasonable replacement ； Through a multi-channel development approach, it is possible to promote large-scale social investment and the establishment of a balanced domestic demand system ； It can maximize the development of an ecological building design system ； It enables the maximization of the personalized qualities of buildings, and helps China’s green buildings take the lead in the world. Through the development of approximately 3 billion square meters of green buildings over 3 years, it is possible to effectively boost residents’ consumption levels. At the same time, private investment can play a key role in driving economic growth, facilitating a revolution in building materials and construction methods, and helping China’s new material industry reach world-class standards. ★Based on preliminary investigations, we estimate that the market price for renovating such old and dilapidated buildings is approximately between 4,000 and 8,000 yuan in megacities, while in smaller cities it is around 2,000 to 4,000 yuan. Depending on the specific circumstances and relevant fees, there is considerable room for price flexibility; thus, such housing renovation programs have the conditions necessary for large-scale market operation. ★Given the current difficulties in advancing large-scale plans for the development of green buildings, it is recommended that the central authorities accelerate the establishment of pilot standards, pilot cities, and pilot projects by 2009, so as to enable practical testing of the policies and their subsequent implementation. ★★★Framework Evaluation: The Direct Impact of the Green Building Revolution on the Macroeconomy in 2009 ★ GDP, which is emphasized in macroeconomics, is not some mysterious concept; it represents the market value of all goods produced by a nation or a political region using various production factors over a certain period of time. Currently, the calculation of GDP mainly relies on the production approach, the expenditure approach, and the income approach. In the context of rebuilding amid the globalization crisis, we analyze the operation of China’s GDP, partly in order to find overall strategies for maintaining stable growth in national income ； The second purpose is to scientifically predict the production capacity necessary to shift certain industries in China to a higher economic structure, as well as the basic resources required for purchasing these final products; it also involves analyzing the interactive relationships among total expenditures on consumption, investment, **purchases, and exports ； Thirdly, it is to illustrate the multiplier effect of counter-cyclical growth. ★Growth in times of crisis is not only valuable; it also comes with low development costs and offers significant strategic arbitrage opportunities for counter-cyclical growth. If the value of such growth is calculated using the expenditure approach, China’s GDP of 1 trillion yuan during crisis periods is equivalent to a GDP volume of 1.2 trillion to 1.5 trillion yuan in normal times. Such counter-cyclical arbitrage growth took place before and after the two World Wars. Today, we have a once-in-a-lifetime historical opportunity to maximize benefits by developing green buildings, and we must not easily give it up. ★If, over the three years from 2009 to 2011, at least 500 million to 1 billion square meters of new construction and sales were achieved each year, and assuming a price of around 2,000 yuan per square meter, this would result in an additional annual investment of 1 trillion to 3 trillion yuan, as well as slightly higher sales figures. The market value of the final products would be around 2 trillion yuan, which is expected to contribute to an economic growth rate of 3 to 8 percentage points for that year. Thus, a secret weapon for China to address crises can be forged, demonstrating that creating history can only begin from China’s internal needs. ★Due to the prolonged duration of this crisis, the decline in production resources, and the entry of construction costs into a period of cyclical adjustment, the financial tsunami has provided us with a rare historical opportunity as well as the necessary conditions for transforming old, dilapidated buildings. According to our calculations, initiating large-scale renovations of old and dilapidated buildings starting in 2009 will result in total cost savings of over 3 trillion yuan compared to carrying out the renovations in phases over 5 to 10 years, while also generating direct economic benefits for China’s construction materials industry of over 1 trillion yuan. Through such **guided industrial integration and transformation, China’s construction industry has the potential to reach world-leading levels, with exports of construction materials, architectural design services, and overall construction management in China expected to increase by over 2 trillion yuan. ★Therefore, the development of green buildings can reshape China. This will enable us to accelerate the advancement of the core sector of China’s real estate industry to the forefront of the global technological revolution and into a more advanced structural framework for the Chinese economy. It will also allow for a phased transformation of the industries related to real estate, thereby fostering innovative changes that will keep China competitive over the next century and establishing new strategic pathways to sustain rapid economic growth. ★We believe that this investment in construction can become the most important strategic asset for China’s efforts to overcome crises and carry out reconstruction over the next 3 years; it can serve as a key force for stimulating domestic demand on a large scale, and represent a significant effort to restructure China’s large-scale industrial systems. It will also help the world reassess China’s development potential and its ability to transform its economic structure. ★★★The benefits of this opportunity: The essence of transforming old, dilapidated buildings into green buildings lies in the rational allocation of land values. In times of crisis, the entire society needs to get involved in reconstruction; financial and resource resources must be invested to stimulate domestic demand. Transforming old, dilapidated buildings into green buildings is, in fact, a strategic approach to expanding domestic demand through the use of resources. It is only in times of crisis that it becomes possible to increase the density of construction in order to foster economic growth, as well as to adopt measures that boost local fiscal revenues by increasing building density. Therefore, this policy is temporary in nature – it represents a reorganization of opportunities for gain – and it constitutes a more clever and strategic way of fostering growth compared to relying solely on financial investment. ★Therefore, the essence of transforming old dilapidated buildings into green buildings lies in regulating the distribution of national income within a specific scope; it represents a strategic shortcut and a key resource for China to turn challenges into opportunities in its development. This revolution is, in fact, the culmination of two thousand years of the Chinese nation’s pursuit of unity between humanity and nature; its nature can be defined as the development of green architecture to recreate an energy-efficient China. China, which is in an era of crisis and transformation, must pay attention to this, take action, and make efforts. ★This reform represents the most ideal crisis-recovery framework that takes into account the interests of all parties, and it can also counteract the negative effects of reduced construction of commercial housing, thereby facilitating rapid economic growth. It can address the issue of declining land transfer revenue in local areas, providing an opportunity for their transformation. It can innovate a low-cost development model for the renovation of old and dilapidated buildings in our country, and is the most ideal way to effectively improve the overall level of construction in China. It is capable of completely transforming the model of commercial housing development in China, promoting the diversification of entities involved in construction, and simultaneously raising the overall level of commercialization in China’s real estate industry. Therefore, the market for upgrading old dilapidated buildings is an important asset for us to overcome the crisis. ★★★Successive implementation: The construction of houses in towns and villages should become the second main front for promoting green buildings. ★Based on comprehensive statistical analysis, as of the end of 2008, there were approximately 20,000 established towns and 15,000 rural areas across the country. The total population living in these towns and villages was over 900 million; of this, about 150 million people lived in the built-up areas of the towns, around 40 million lived in the built-up areas of the rural areas, and more than 700 million lived in villages. Within this rural village system, the total floor area of buildings in rural areas across the country amounts to over 33 billion square meters, of which more than 27 billion square meters are residential buildings. Due to the lack of commercialization reforms for rural houses, as well as the absence of unified planning and advanced architectural design services, over the past two to three decades many rural houses have been demolished and rebuilt again and again. Instead of being transformed into green buildings, they have ended up as mere combinations of rebar and concrete. This kind of scattered, individualized renovation of rural houses represents the most resource-wasting aspect in China at present, as well as the world’s most underutilized wealth. Therefore, without carrying out large-scale renovations of green buildings in rural houses, it cannot be said that a green building revolution has taken place in China. ★Based on statistical data such as the 2007 Statistical Bulletin on Rural and Town Construction, it can be estimated that by 2008, the total built-up area of rural and town areas across the country was around 900 million square meters, of which residential areas accounted for over 500 million square meters. Consequently, the total investment in rural and town construction in 2008 was around 800 billion yuan; of this amount, approximately 400 billion yuan was invested in the construction of housing in rural and town areas through self-financing by farmers. The output resulting from these constructions is not currently included accurately in China’s GDP figures. As a result, the statistics related to China’s GDP in the field of rural housing construction are inaccurate. ★To this end, by granting limited property rights to rural houses, the mainstream system of individual construction of such houses can be transformed into a system of jointly built buildings that feature unified planning, rational design, extensive use of energy-saving technologies, commercialization, intensification, and building consolidation. This transformation will create a second front for green architecture in China and drive growth in the country over the next two to three decades. At present, the agricultural population in the suburban and transitional areas of cities across the country accounts for nearly half of the rural population. There are approximately 10 billion square meters of farmhouses in these areas. In line with the principles of developing green buildings and conserving resources, it is possible to convert or rebuild at least 300 billion square meters more of land in these areas into green buildings. This represents a valuable resource that can meet the urban needs, and it has the capacity to accommodate urban and rural migrants; it can also enable the development of world-class models for green building in villages and towns. ★This reform will directly foster the overall interaction between urban capital and green development in rural areas. Its practical significance lies in resolving once and for all the issue of capital accumulation needed for a green revolution in China’s rural areas, as well as addressing the demands associated with China’s urbanization process. This flow of capital from cities to rural areas represents the most ideal approach for advancing China’s modernization. To this end, it is necessary not only to accelerate legislation to lift restrictions on the simple transaction method that allows urban consumers in designated areas to purchase rural homes directly ； Moreover, greater support should be provided for urban consumers to engage in, either individually or collectively, more advanced forms of cooperation with rural landowners, including those who own homesteads, and agricultural cooperatives, in the joint construction, renovation, and expansion of energy-efficient houses. This is aimed at achieving a greater degree and higher level of resource utilization of rural land, including homesteads. The essence of this reform is to use the land property rights held by Chinese farmers to address the needs related to social security, housing security, the distribution of benefits derived from land assets, as well as the demands for green building transformation in rural China, thereby fostering long-term development. ★Therefore, advancing the revolution of green building in rural houses should become the core of China’s green building revolution, and it should be the greatest revolution in the history of global green building. ★★★Model reconstruction: The green building revolution represents a historical opportunity for innovative consumption in China. ★ The economic systems of the United States, Japan, and the European Union, which are more powerful than ours, hold a more advantageous position in the international division of labor. Globalization, technological innovation, market economies, and the advantage of being first-movers are all key factors behind this, but the consumer economy interaction system shaped by advanced economic theories serves as its core. Among them, Keynes’ theory of consumption, Du Senbey’s theory of relative income consumption in the United States, Modigliani’s life-cycle theory of consumption in the United States, and Friedman’s permanent income theory of consumption, among others, all played a direct role in facilitating the historical transition of developed countries toward consumer societies. Similarly, these theories hold significant reference value for China’s pursuit of modernization. ★However, these theories are currently insufficient to support China’s transition to a consumer society during times of crisis. We need to take into account factors such as the efficiency of a unitary **centralized system, limited income levels and the capacity of the income distribution system for adjustment, as well as periodic price fluctuations, in order to develop a consumption theory with Chinese characteristics that can help facilitate China’s economic transformation. We refer to this theory as a rights-inclusive, super-explosive consumption theory. ★The main principles of this theory include the following key points: promoting the commercialization of consumption factors and the marketization of goods, achieving hierarchical consumption in society, and implementing a selective strategy for upgrading and transformation ； Create growth through consumer strategies ； By combining the overall effectiveness of various consumption tools, large-scale quantitative consumption is achieved, thereby promoting the spread of wealth through super-large-scale consumption behaviors ； Vigorously promote the consumption of rights-based goods and implement a flexible reorganization of the consumption structure ； Promoting the financialization of consumption, maintaining the debt link between borrowers and ultimate lenders, creating upward trends in asset prices for both current and future consumption, preserving arbitrage opportunities in asset prices, and establishing a competitive mechanism in which the benefits of consumption offset the price changes associated with consumption debts, and so on. ★As an emerging market economy, China exhibits an unstable relationship among the three levels of factor commodification, commodity marketization, and market systematization. A rational arrangement of these three levels can generate significant momentum in domestic demand, equivalent to creating one-third more consumer space in China. Therefore, advancing systematic market allocation in a scientific manner is an important approach to boosting domestic demand in times of crisis. ★In fact, the old dilapidated building renovation projects we discussed earlier are a type of construction that takes into account the rights of the original owners and relies on administrative efforts to stimulate domestic demand; it represents a form of consumption that involves rights as well, and we can define it as integrated consumption. This integrated consumption theory is a new type of consumption theory suitable for China to expand domestic demand. Its essence lies in large-scale quantitative consumption in the era of China’s economic upgrading. This form of consumption should serve as the main transitional mechanism for China to shift from a production-oriented society to a consumption-oriented one; it should be a key strategic tool for establishing a new domestic demand-based social system in China, and it should represent a unique large-scale consumer system of its own. Last edited by Lailai on 2009-3-10 13:03]