Shanghai has undertaken a regeneration campaign that includes transforming urban villages and renovating blighted areas.

By turning the city's largest urban village in its downtown area into an iconic project, China State Construction Engineering Corp, or CSCEC, has shown how urban renovation can reshape the city, sources said.

Gui Zhihua, head of Hongqi village's economic organization, said he never imagined that the smelly and messy market through which he had to wear rain boots and hold his nose to pass every day during his childhood could become a bustling business district of high-rises one day.

Hongqi village is one of Shanghai's largest urban villages situated in northwestern Putuo district, and it had all the problems of a poor-quality settlement about a decade ago.

Occupying an area of 586 mu (39.1 hectares), Hongqi village used to be home to nine large primary markets (including a fruit market and wet market), 90 printing houses, 207 cold storage warehouses, more than 1,000 stalls, and a mobile population of more than 60,000 people, said Zhao Weimao, project director for Hongqi village at the Shanghai company of China Overseas Land and Investment Ltd (COLI).

While Gui and his villagers thought they would have to live in the filthy and messy place forever, rapid changes started to take place in 2018 as COLI, a subsidiary of Beijing-based CSCEC, decided to invest some 30 billion yuan ($4.13 billion) to regenerate this area.

In five years, a mega complex with a gross floor area of about 1 million square meters was erected, consisting of residential properties, office buildings, shopping malls, theaters, parks and long-term rental apartments.

The successful renewal of Hongqi village represents a microcosm of Shanghai's rapid urban renovation over the past few years.

Among the 49 urban village renovation projects approved between 2014 and 2020, 40 have been completed, benefiting 23,815 households, and four out of the 13 new projects approved from 2021 to 2022 have completed renovation, improving the living conditions of 2,900 households, according to local news portal Shanghai Observer.

A further 30 new transformation projects will be launched in three years from 2023, and are projected to benefit at least 13,000 households.

Amid the rapid urban renovation, COLI announced a grand plan to turn one of the city's old downtown neighborhoods into a new landmark.

The project, known as East Jianguo Road project, is located in Shanghai's Huangpu district in the city center.

Taking up an area of 147,500 square meters, the project involves the relocation of 8,500 households and about 40,000 people.

"Before the relocation, this area was the largest old neighborhood in Huangpu district, housing about 10,000 families without modern toilets, which means people had to clean the wooden toilet every day," said Jin Tian, general manager of COLI Shanghai.

Sitting in the core area of Shanghai's Huangpu district, the project is close to the site of the First National Congress of the Communist Party of China and adjacent to the city's landmark Xintiandi in the north.

Apart from the giant redevelopment area of about 400,000 square meters (gross floor area), another challenge of the project was to preserve and renew 13 historical buildings, which requires protection of the urban fabric and inheriting the historical culture while renovating, said Jin.

Since 2020, COLI has invested nearly 60 billion yuan in the project, trying to rebuild the area into a landmark equivalent to Xintiandi, Jin said.

Shanghai is among the first batch of cities nationwide receiving financial support from the Finance Ministry for urban regeneration, according to a notice on the official website of the ministry.

The cities will receive a certain amount of subsidies in accordance with their location, and Shanghai will receive a total subsidy of no more than 1.2 billion yuan, according to the notice jointly issued by the Ministry of Finance and the Ministry of Housing and Urban-Rural Development in April.