In a remote county on the north China plain, two hours’ drive southwest of Beijing, is Xiongan New Area. China announced its establishment on April 1.
Hyped as an innovation-driven heir to Shenzhen, but inside the “Promised Land”, it is at the moment scattered with empty houses, half-finished buildings and vacant factories.
“We are not allowed to trade houses,” Duan, a local property agent, said. “Even construction and renovation works are banned in order to suppress property speculators.”
The Xiongan New Area covers the counties of Xiongxian, Rongcheng and Anxin. According to an official circular, it would be developed into a city meant to serve as a model for China’s development over the next millennium.
And it is placed on equal footing with China’s two great successes in urban development — Shenzhen and Shanghai’s Pudong New Area.
After the announcement, speculators flocked to the district. Housing prices in rural Xiongxian almost doubled, local newspapers reported.
Within a week, the government responded by banning property sales entirely in the counties, forcing real estate agents to close.
“Property transactions after April 1 are classified as illegal according to the county government. We have seen buyers being arrested and the deals becoming invalid,” Duan said.
In May, a month after the announcement, the preparatory committee for Xiongan New Area discovered 3,631 real estate violations. Ninety-one people were punished, according to the local media.
The speculation frenzy has been stubbed out after local authorities ordered a freeze on property transactions in all three counties. The sales restriction then spanned across more than a dozen surrounding counties last month, including Xushui district in Baoding, about 20 km. from the new area.
Clusters of new residential blocks lining the streets in Anxin stayed mostly empty. By far, the government has no intention to ease the curbs.
“China is seeking a new path for urban development through the New Area, said a policy adviser, stressing the development will not be “kidnapped” by property developers, Xinhua reports.
Experts said China drew on the lessons in its rapid urbanization process in the past, and the area’s housing market is supposed to be dominated by low-rent and public rental apartments as a core competitive edge for spurring and retaining innovators and professional workers.
“No construction or even small-scale renovation is allowed,” said Huang, who runs a door business in Anxin. “The officials have been working on the land survey and they said the purpose [of the construction ban] is to reduce ‘losses’ during the process of land and building acquisition, as the apartments maybe demolished if needed.”
In order to prevent homeowners raising their compensation when it comes to land acquisition, the local government set up inspection gates at access points of the countryside in the counties. Trucks carrying construction materials such as bricks and mortar were barred, according to the local media.
“The local officials signed an executive order to stop construction works on our house, stating the works cause air pollution,” said Wang, a resident of a rural village in East Xiongxian County.
Standing in front of his unfinished house, Wang said he has no fantasy about the “great strategy to last a millennium” or getting rich. “How can I applaud the plan if it leave me homeless?”
Translation by Ben Ng with additional reporting
[Chinese version 中文版]
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