Subsidy Ceilings and Sequential Synergy: Steering Sustainable Outcomes Through Dynamic Thresholds in China’s Urban Renewal Tripartite Game

Aligning with the UN Sustainable Development Goals (SDGs 11 and 13), this study examines how dynamic subsidy thresholds steer environmental resilience, social inclusion, and fiscal sustainability in China’s urban renewal. Using evolutionary game theory (EGT) and system dynamics (SD), stakeholder strategies are modeled under varying policy interventions, with key parameters calibrated through Chongqing’s LZ case and MATLAB simulations. These include government subsidies (M1, M2), penalties (S2), and stakeholder benefits (R1–R5). The results reveal the following two distinct types of critical thresholds: a universal and robust fiscal warning line for developers (M1 > 600 k RMB) and a threshold for residential subsidies that is moderated by psycho-social factors (M2), with its value fluctuating within a certain range (approximately 550 k RMB to 850 k RMB). A sequential synergy pathway is proposed: “government-led facilitation → developer-driven implementation (when R3 > 450 k RMB) → resident participation (triggered by R2 > 150 k RMB).” The study advocates differentiated incentives and penalties, prioritizing early-stage governmental leadership to foster trust, promote inclusive participation, and align with environmental, social, and economic sustainability goals. This integrated framework reveals critical policy leverage points for enhancing social and fiscal resilience, providing a replicable model for sustainable and resilient urban governance in the Global South.