(coco) #1

POLITICS


O


n April 1, China announced an ambitious plan to estab-
lish a “national new area” called “Xiongan” in a swathe of
Hebei Province, which encircles Beijing, about 100 kilo-
metres south of the capital. According to the plan, the Xiongan New
Area will take over Beijing’s “non-capital functions” and will become
“a demonstration area for innovative development.”
Spanning the three counties of Xiongxian, Rongcheng and Anxin
in what is currently a largely agricultural region, the new area will
start as a 100-square-kilometre zone, and in the long term will cover
2,000 sq km, almost 50 percent larger than Beijing’s urban area, said
the announcement.
The announcement of such an ambitious plan immediately caused
a stir in China’s stock markets, as the prices of several dozen compa-
nies that have investments in the proposed area increased by as much

as 80 percent in seven business days, prompting the authorities to
temporarily suspend the trading of 13 companies by April 15.
The response of the real estate market has been even more swift.
Property prices in the affected area more than doubled in the hours
after the announcement. Then in the following days, homebuyers
flocked to the area in the hope of buying property to resell at a higher
price in the future. Local authorities responded by suspending all
property sales in the region.

Ambitious
Establishing special economic zones (SEZs) and new areas is noth-
ing new in China. Besides some dozen special economic zones estab-
lished in the 1980s that kickstarted China’s economic reforms, 18
“national new areas” have been set up since 1992.

Xiongan New Area


China’s ‘1,000-year’ Project


China’s recently announced plan to create a new city 100 kilometres from Beijing has triggered both


enthusiasm and concern among China’s investors and economists


By Yu Xiaodong


Photo by CNS