"Securitize all state-owned assets as much as possible." The profound meaning behind the reform of state-owned assets in Hubei

Wuhan Hongshan Artificial Intelligence Building was a "ghost building" with an occupancy rate of less than 30% six years ago. Now, it has become a "billion-yuan building" with an annual output value of 1.5 billion yuan. What's the secret? Asset securitization - Issuing Commercial Mortgage-Backed Securities (CMBS) on the Shanghai Stock Exchange to raise 301 million yuan in one go. The rental income that would take 10 to 20 years to recoup the cost in the traditional model has been "magically" realized in advance.

The abandoned mine has been transformed into the first domestic hydrogen energy warehouse. The bus group raised 601 million yuan through the future ticket revenue rights. The exploration right of the phosphate mine has obtained a 1.8 billion yuan credit line from the bank... Behind these "turning waste into treasure" cases is a reform logic that has been repeatedly emphasized: "All state-owned resources should be assetized as much as possible, all state-owned assets should be securitized as much as possible, and all state-owned funds should be leveraged as much as possible."

The official media's intensive publicity campaign gives people an illusion that this seems to be an original reform in Hubei.

However, a little retrospection reveals that this set of rhetoric first appeared in Hunan, 600 kilometers away. The time was March 2, 2023, the place was Changsha, and the protagonist was Li Dianxun, the then Executive Vice Governor of Hunan Province.

Li Dianxun, who put forward this reform logic, was transferred to be the Deputy Secretary of the Hubei Provincial Party Committee on December 31, 2024, and was elected the Governor of Hubei Province in January 2025.

But what really deserves to be questioned is: Why was it March 2023? Why is it now?

The answer lies in a more solemn word - Debt resolution.

The Mobilization of "Three Types of Resources" under the Heavy Pressure of Debt Resolution

We need to go back to 2022. In May of that year, the General Office of the State Council issued the "Opinions on Further Revitalizing Stock Assets and Expanding Effective Investment". This was a policy signal at the central level: Against the backdrop of weak investment-driven growth and the unsustainability of land finance, local governments need to shift from "incremental expansion" to "stock revitalization".

In August of that year, the Hunan Provincial Development and Reform Commission issued a notice on establishing a ledger for revitalizing stock assets. Cities such as Yueyang and Changsha successively launched the work of revitalizing the "three types of resources" - At that time, this was just a relatively mild "stock revitalization" campaign.

However, at the beginning of 2023, the situation changed suddenly. Li Dianxun's "three as much as possible" upgraded the originally tepid "revitalizing stock assets" to the "reform of the three types of resources". From "can do" to "as much as possible", from "encouraging pilot projects" to "full-field, full-caliber, and full-coverage".

2022 was a turning point. After three years of the pandemic, local fiscal revenues plummeted, and the land transfer fees, once the "second fiscal revenue", dropped sharply. According to public data, the land transfer fees in 300 cities across the country dropped from 6.5 trillion yuan in 2021 to 4.8 trillion yuan in 2022, a decline of more than 25%. At the same time, during the pandemic, local governments borrowed money to fight the pandemic, ensure people's livelihoods, and stabilize the economy, and the scale of implicit debts expanded rapidly. At the end of 2022, the debt risks in various places were exposed intensively, and the central government began to require local governments to "take care of their own children" and find their own ways to resolve debts.

Against this background, the "reform of the three types of resources" is not difficult to understand. This is not an asset optimization that "adds icing on the cake", but a self-rescue for debt resolution in a "last-ditch battle". When land sales are sluggish, when traditional financing channels are tightened, and when the debt maturity date is approaching day by day, local governments must find new ways to "make money". Therefore, all movable resources must be mobilized: six types of state-owned resources (land, minerals, forestry, water conservancy, energy, and data), five types of state-owned assets (physical assets, creditor's rights, equity, franchise rights, and future revenue rights), and two types of state-owned funds (idle and inefficient) - This is a comprehensive inventory of the state-owned "family assets" and an extreme test of the realization ability.

More importantly, the capital operation tools originally used for development have been transformed into weapons for debt resolution. Asset securitization, REITs, ABS, CMBS... These professional terms originally belonging to the financial market have now become regular weapons in the local governments' toolboxes for debt resolution.

The story of Hongshan AI Building has been repeatedly publicized precisely because it perfectly interprets this logic: In the traditional model, it would take 10 to 20 years to recoup the cost through rent for the same building, but through asset securitization, 300 million yuan can be raised immediately - This is to discount the future cash flow and use it today.

From Hunan in March 2023 to Hubei at the end of 2024, Li Dianxun carried out a radical experiment in the two central provinces with this reform logic. And the real test of this experiment has just begun.

From Huang Qifan to Li Dianxun

On December 31, 2024, Li Dianxun was transferred from Hunan to Hubei. This was a typical "firefighting" appointment.

How bad was the situation in Hubei at that time? The impact of the pandemic had not fully recovered. The 100-billion-yuan debt of the Contemporary Group had exploded. The hidden dangers left by Jiang Chaoliang had not been completely cleared (he was investigated two months later). The state-owned "three types of resources" cleared in the whole province reached as high as 21.5 trillion yuan - What does this number mean? It means that there are too many assets "sleeping", too many debts to be repaid, and too many holes to be filled.

In contrast, Li Dianxun's days in Hunan were a little better, but only "a little". When he became the Executive Vice Governor of Hunan in December 2021, the debt pressure in Hunan was also huge. But at least, Hunan gave him room for trial and error. From the mild revitalization in 2022 to the radical "three as much as possible" put forward in March 2023, and then to the phased results of revitalizing 22 billion yuan in Yueyang and 24.8 billion yuan in Changsha - Hunan became the experimental field for Li Dianxun to verify his ideas.

Now, he is going to apply this approach to the more severe battlefield in Hubei.

Those familiar with Li Dianxun's resume will notice a detail: He worked in Chongqing for 27 years, from 1991 to 2018. During these 27 years, Huang Qifan was in charge of Chongqing for 14 years (2002 - 2016). Li Dianxun successively served as the Director of the Legal Affairs Office, the Deputy Director of the Development Zone Management Committee and the Director of the Finance Bureau, the Chairman of the State-owned Assets Company, and the Secretary of the District and County Party Committee.

This experience inevitably makes people wonder: Did Li Dianxun's thinking on the "reform of the three types of resources" get inspiration from Huang Qifan?

Comparing the practices of the two, the similarities are indeed astonishing.

What Huang Qifan is most praised for in Chongqing is creatively turning resources into capital. As Huang Qifan said, everything can be reorganized, and the reorganization of debts and assets has always been his forte.

The most classic case is the "land ticket system": The construction land indicators generated after the reclamation of rural homesteads are publicly traded on the exchange - This is "turning resources into assets". Farmers have received real benefits, the government has obtained construction land indicators, and developers have bought legal land. It's a win-win situation for all three parties.

Li Dianxun's "all state-owned resources should be assetized as much as possible" follows the same logic. Xiangtan has transformed the rooftops of schools and hospitals into photovoltaic power stations, and Daye has transformed abandoned mines into hydrogen energy warehouses - Isn't this a new version of the "land ticket system"? It's just that Huang Qifan revitalized land indicators, while Li Dianxun revitalizes a wider range of "resources".

Another specialty of Huang Qifan is asset securitization. He turned Chongqing's "Eight Investment Groups" (eight financing platforms) into financing machines, raising funds for urban construction by issuing corporate bonds and medium-term notes. This was groundbreaking at that time - Packaging the government's assets and future revenues into financial products and selling them.

Li Dianxun's "all state-owned assets should be securitized as much as possible". The asset-backed special plan issued by Hunan Xiangjiang Group, the CMBS of Tianxin State-owned Assets Group, and the bus group in Hubei raising funds through the future ticket revenue rights - These are all ways to realize the "future money" in advance. The 301 million yuan financing of Hongshan AI Building and the bond issuance of Huang Qifan's "Eight Investment Groups" back then are just tool upgrades, but the underlying logic is exactly the same.

As for "all state-owned funds should be leveraged as much as possible", Huang Qifan is an expert in this field. His most proud case is the disposal of bad bank debts in Chongqing: Using 3 billion yuan of fiscal funds to leverage 18 billion yuan of capital injection, resolving financial risks with a leverage ratio of 1:6. Li Dianxun's "Three Credit Loan Reforms" in Hubei - Using 1 billion yuan of risk compensation funds to leverage 100 billion yuan of credit loans - The leverage ratio is 1:100.

Of course, in the author's understanding, leveraging means using state-owned capital to leverage social capital as much as possible, thereby reducing the government's on-balance-sheet leverage ratio.

But the times have changed.

If Huang Qifan was doing addition, Li Dianxun is doing subtraction.

In Huang Qifan's era (from the 2000s to the 2010s), the main tasks of local governments were development, construction, and expansion. Capital operation was to raise money for construction, which was "adding icing on the cake". So Huang Qifan could proceed steadily, one pilot project after another.

Li Dianxun is facing a situation of high debt pressure, the failure of land finance, and taking over the exposed private enterprises. His capital operation is not for expansion, but for "stopping the bleeding" - Resolving debts, filling holes, and maintaining operations. This is "providing timely help", or even a "last-ditch battle". So he doesn't have time for slow pilot projects and must promote it "full-field, full-caliber, and full-coverage".

Huang Qifan is a "conservative" in capital operation, while Li Dianxun is a "radical". The former uses capital operation as a tool, while the latter uses it as a weapon. The former is playing a big game of urban development, while the latter is fighting a tough battle for debt resolution and survival.

Li Dianxun obviously has no choice. Or rather, his choice is: Survive first, and then talk about the future.

Showing Different Skills - From Asset Securitization to Asset Tokenization

Although Li Dianxun's "three as much as possible" was only put forward in Hunan and Hubei, it has gradually become the standard action in various places. But interestingly, when the same script is performed on different stages, the effects are very different.

Tianjin is playing the game of "stringing beads into a chain". The "Revitalize · Jichen No. 1" real estate trust of Northern International Trust packs the scattered office buildings, parking lots, and shops in the hands of the urban investment company into the trust, solving the long-standing problem of local state-owned assets - Single assets are too small to be valuable, but when packed together, they can be used for financing.

Huanggang is even more radical. In December 2024, the "Everbright Caitong - Shenghe - Eastern Hubei Pearl Supply Chain Finance Phase 1 ABS" was successfully issued, with an amount of 499 million yuan and an interest rate of 2.80%. The debtors are four second-level subsidiaries under the Huanggang State-owned Capital Investment and Operation Group - the Grain Reserve Company, the Ecological Agriculture Company, and the Trading Company. These companies themselves do not have the qualification to issue bonds, but by "breaking them into pieces", they bypassed the regulatory red line. The credit enhancement method has also changed. Instead of being guaranteed by the urban investment entity, it is the Hubei Provincial Financing Guarantee Group that steps in. This is the new way of playing supply chain ABS in 2024: "Bank guarantee + Multiple debtors + Provincial guarantee".

But the most magical one is the "wealth creation movement" of including data assets in the balance sheet.

In January 2024, the "Interim Provisions on the Accounting Treatment of Enterprise Data Resources" of the Ministry of Finance was officially implemented, and urban investment companies immediately smelled the opportunity. According to the statistics of the Shanghai Advanced Institute of Finance Think Tank, as of the end of 2024, 228 non-listed companies across the country had included data assets in their balance sheets, including 66 urban investment companies and 128 state-owned enterprises similar to urban investment companies - 194 "urban investment-related" companies accounted for 85%.

Let's see what they have stuffed into the balance sheet: Qingdao Huatong Group listed the "Enterprise Information Verification Data Set" as an intangible asset; Nanjing Yangzi State-owned Assets included the "Desensitized Water Consumption Data of 3,000 Enterprises" in its assets; Tianjin Lingang went even further, directly using the "Communication Pipeline Operation Data" and the intellectual property certificates of the "Intelligent Digital Human" for mortgage loans and obtaining a 15 million yuan credit line. The logic of this way of playing is very simple: Increase the denominator and reduce the debt ratio.

In this arms race of asset revitalization, the most cutting-edge weapon is RWA, Real World Asset Tokenization.

In April 2025, Dalian did something even more radical: Putting the entire island "on the chain". The project of revitalizing the idle resources of Xiaopingdao in Dalian was officially signed and launched, with a total investment of 2 billion yuan. This is the first domestic RWA digital island project. The project is a cooperation between China Economic Construction Investment Group and Dalian Shunyao Group. With the support of the Hunan Provincial Department of Culture and Tourism and the provincial government, 62.3 hectares of idle reclaimed land are tokenized through blockchain technology, and digital tokens are issued.

What does this concept mean? The traditional approach is to either sell this idle land to developers or borrow money for construction and then slowly attract investment and operate to recoup the cost. But the way of playing RWA is completely different: The future revenue rights of the medical and nursing hotels, hot spring complexes, and ice and snow venues on the entire island are packed into digital tokens and sold to global investors. What investors buy is not the land, but the share of the future cash flow generated by these assets - They can be traded on the blockchain at any time, 24 hours a day, and can also be circulated across borders.

In essence, they are all about realizing the assets that can generate future revenues in advance. It's just that traditional ABS needs to go through exchanges, securities firms, and rating agencies; RWA directly bypasses all intermediaries through blockchain and smart contracts. Moreover, RWA opens the door to the global capital market - The idle island in Dalian, which could only borrow money from domestic banks or issue bonds in the past, can now be directly sold to investors in Hong Kong, Singapore