Can Xiongan match the success of Shenzhen or Pudong?

April 05, 2017 10:01
Xiongan New Area is about 100 kilometers southwest of downtown Beijing. It will initially cover 100 square kilometers before being expanded to about twice the size of Hong Kong. Photo:

The central government suddenly unveiled a plan to set up Xiongan New Area in northern Hebei province over the weekend.

Policymakers said Xiongan New Area is as strategically important as China’s two major special economic zones -- Shenzhen and Shanghai’s Pudong -- created by Deng Xiaoping and Jiang Zemin, respectively.

New areas and new trade zones have been sprouting across the nation in recent years. The much-hyped Shanghai Free Trade Zone has failed to deliver the desired impact since its establishment in 2013. Soon after, another 10 Free Trade Zones have come into existence in Guangdong, Tianjin, Fujian, Zhejiang, Hubei, Henan, etc.

Meanwhile, more than 10 national-level new areas have been created since 2014, located in cities like Guizhou, Qingdao, Dalian, Nanjing, Fuzhou and Changchun, among others.

Would Xiongan become just another special zone?

Judging from official media and key personnel changes in the administration, Xiongan may have more substance to it.

Xinhua news agency described the plan as “a significant historical and strategic choice by the Communist Party Central Committee with Xi Jinping as the core."

It is “another new district with national implications following Shenzhen and Pudong”, Xinhua said.

Shenzhen has grown from a fishing village into a bustling city, while Pudong has turned from a wetland into China's financial hub. It seems that Xi is keen to build Xiongan New Area into his own legacy.

Also, Xu Qin, the party secretary and mayor of Shenzhen, has been appointed Hebei provincial deputy party secretary. Xu, who will be in charge of Xiongan New Area, is believed to be a close aide of Xi.

The new area will cover about 100 square kilometers initially and will be expanded to 200 square km. in the medium term and about 2,000 square km. (about twice the size of Hong Kong) in the long term.

The special zone will take up some of the non-capital functions from Beijing and play a key role in restructuring the urban layout in the Beijing-Tianjin-Hebei region, according to the official document.

It’s expected to house many non-government facilities, including markets, schools, research institutions and hospitals, which would be relocated out of Beijing.

The central government hopes to tackle some of the capital city’s woes such as exploding population, traffic jams, stretched public services, skyrocketing home prices and worsening pollution.

It’s reported that the Xiongan New Area will explore new ways of optimizing development in densely populated areas, which may center around public rental housing.

Beijing is increasingly concerned about the frenetic housing bubble across the nation. Under Xiongan’s development model, private housing buying and selling will be ruled out in the new area.

This article appeared in the Hong Kong Economic Journal on April 3

Translation by Julie Zhu

[Chinese version 中文版]

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Hong Kong Economic Journal columnist