Author: Wu Gang
Posted on: Caixin Global, April 7th, 2017
Chinese authorities’ announcement in April that a special economic zone will be built in northern China’s Xiongan New Area, near Beijing, has drawn widespread attention, as the government has been comparing it to the milestone special economic zones created in Shenzhen and Shanghai Pudong decades ago. The government hopes the new project will create another economic growth phenomenon. How important is this new zone to China and its investors? And why choose this site? Here are some answers based on recent speeches from government officials and experts who participated in drafting the project:
- What is the Xiongan New Area?
On April 1, Chinese authorities announced a decision to create an economic development zone in northern China’s Hebei province. The zone, called the Xiongan New Area, encompasses three counties in a largely undeveloped region about 100 km south of Beijing.
- What is the zone’s primary function?
The Xiongan New Area will encourage development and relocations of businesses and public services in ways that relieve Beijing of some of its urban stress. The zone is also expected to serve as a frontline project for an ongoing government effort to coordinate development in a region that includes Beijing, Hebei and the city of Tianjin. The project is one of the most important strategic plans unveiled since President Xi Jinping took office in 2013.
How important is this project for China’s economy?
The official Xinhua News Agency recently called the Xiongan New Area “a great millennial plan,” comparing its launch to similar milestones when the government announced the Shenzhen Special Economic Zone in 1980 and the Shanghai Pudong New Area in 1993. The Shenzhen zone served as a bridge between China’s Soviet-style planned-economy period and its market economy. The Pudong development area has been credited with helping Shanghai become an international hub for trade and financial services. In turn, that development has supported the further opening-up of China’s economy to the rest of the world.
The Shenzhen and Pudong projects helped kick-start industrial expansions in the Pearl River Delta and Yangtze River Delta regions respectively. Xi is pushing hard to get less-developed parts of northern China on board the same modernization bandwagon. Xinhua said Xi has personally inspected parts of the so-called Jing-Jin-Ji region — which includes Beijing, Tianjin and Hebei — many times to discuss coordinated development strategies with local officials. And he held talks on the Xiongan plan on Feb. 23 while touring Anxin county, one of the three counties in the new zone.
- Why was this region selected?
The area is considered a suitable location for centrally coordinating the joint development of Beijing, Hebei and Tianjin. The Xiongan New Area encompasses Xiongxian, Rongcheng and Anxin counties, which are all within 150 km of Beijing to the north and Tianjin to the east, and less than 200 km northeast of Hebei’s capital, Shijiazhuang. Existing and future transportation networks that include highways and high-speed railways will put Xiongan within a 30-minute commute of each city, said He Lifeng, head of the National Development and Reform Commission, the country’s economic planner.
Xiongan residents will enjoy a relatively clean environment and the largest freshwater lake in North China Plain — Baiyangdian. The area’s current population is small and its development level low, which means it’s a “blank page” with strong potential for urban development, according to Xu Kuangdi, a former Shanghai mayor who now heads the Jing-Jin-Ji Coordinated Development Expert Advisory Committee.
- Which of Beijing’s companies or organizations will be moved to Xiongan?
Officials have made it clear that Xiongan will be designed to help unburden Beijing, which for years has doubled as the nation’s political center as well as a fast-growing business metropolis with big-city ills. Authorities announced that Xiongan will shoulder some of Beijing’s “noncapital functions,” although to date no one has said which companies or organizations have been slated to move to Xiongan. Urban planners say relocations will be gradual, and they discounted a recent report that all state-owned enterprises now based in Beijing will be forced to move to Xiongan. Xinhua reported the zone is expected to become a new, high-tech industry base with infrastructure and services that attract skilled workers and companies. The area is also expected to offer quality education, health care and other public services.
Many who now live in Beijing say they enjoy the city’s culture and conveniences but complain about traffic, air pollution and high property prices. It’s hoped Xiongan will offer business opportunities comparable with those now in Beijing, giving young adults and families a new option for a capital-city-like lifestyle, said Wu Hequan, a member of the Jing-Jin-Ji committee.