China to test new development model in Xiong'an

May 02, 2018 10:21
As part of Xiong’an green development initiative, ecological restoration work will be carried out in Baiyangdian wetland.  Photo: China Daily/VCG

The China-US trade row is still evolving, casting a shadow over foreign trade and the manufacturing sector of Asia's largest economy. To balance the country’s economic growth structure, investment and domestic consumption will play a critical role.

Infrastructure investment, for instance, is one of the key areas.

Among infrastructure initiatives, Xiong’an New Area, a state-level new area in the Baoding area of Hebei, had been a key market focus after the plan was first announced. But the attention faded due to a lack of fresh details. On April 21, authorities finally announced the master plan.

According to the plan, Xiong’an will have a total area of 1,770 square kilometers, and blue (wetland) and green (forests) areas will take up 70 percent. (About 10 percent of the new area's land will be put under permanent protection as basic farmland).

The total area of land available for development and construction work will be capped at 30 percent, or approximately 530 square kilometers.

By 2035, Xiong’an will basically develop into a modern city that is green, intelligent, and highly livable, with stringent standards for power supply, household waste treatment, etc.

Beijing plans to shift "non-capital functions" of the government to Xiong’an, including universities, hospitals, company headquarters, financial institutions, and some government agencies.

The New Area will focus on developing high value-added industries such as IT, biotech, new materials, environmental protection, software, consultancy, etc. General manufacturing or low-end industries will be limited.

Also, the area will set up free-trade zone and bonded areas to lure foreign investors.

An area of 100 square kilometers will be developed in the initial stage, and extended to 200 square kilometers in the medium term. 

There will be high-speed railways and highways running through the area to better connect it with neighboring cities.

Xiong'an will serve as a showcase of China’s new growth model. And the central government will use a different set of metrics to assess government officials’ performance in relation to the initiative.

This article appeared in the Hong Kong Economic Journal on April 30

Translation by Julie Zhu

[Chinese version 中文版]

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RC

Senior investment banker