Breaking New Ground

By+Yuan+Yuan

Move aside Shenzhen Special economic Zone and Shanghai Pudong New Area， theres a new kid on the block. Chinas successful test beds for reform and opening up will become a potent threesome after the news that three small counties resting in north Chinas Hebei Province will form a new development zone， called Xiongan New Area.

The news， released on April 1， reported that Xiongan New Area when completed will be spread over 2，000 square km， making it larger than the Shenzhen Special Economic Zone， 1，991 square km， and the Shanghai Pudong New Area， 1，210 square km.

Why there？

Located about 100 km southwest of downtown Beijing， the new area， a plastics manufacturing center， had hardly registered on Chinas economic map before. Even many people from the same province had never heard of the three counties before the news.

According to reports， the three counties， Xiongxian， Anxin and Rongcheng， had a combined GDP of about 20 billion yuan （$2.94 billion） last year， less than 1 percent of Beijings economic output.

The decision to establish the new area is part of a greater strategy， which China initiated in 2014， to jointly develop Beijing， the port city of Tianjin and Hebei Province to improve the regions economic structure， environment and public services， and bridge the gap between the capital and the industrial and rural areas surrounding it.

The distance of the new area from both Beijing and Tianjin， the two major municipalities in north China， is about 100 km， the same as that from Beijing to Tianjin， which makes the interconnected area resemble an equilateral triangle.

He Lifeng， Chairman of the National Development and Reform Commission （NDRC）， told Xinhua News Agency that transportation connections of the new area will be very convenient， with Beijing， Tianjin and Shijiazhuang， capital city of Hebei， all within a half-hours commute.

In addition the Baiyangdian Lake， the largest freshwater lake in north China， is located in the zone， which will make it ecologically healthy. The relatively less-developed economy in the region also offers developers plenty of room.

Beijing now is home to over 21 million people， and the number is expected to reach 23 million in 2020. Traffic congestion， soaring property prices and excessive burdens on resources are all severe “urban ills” of the huge capital. The root of these issues lies in the capital taking on too many “non-capital functions，” and Beijing has long been considering curbing population growth and relocating industries and other non-capital functions to Hebei in the coming years， said He.

Beijing will focus on its “capital functions，” which means serving as the countrys political center， cultural center， and center for international exchanges and science and technological innovation.

Another major task of the Xiongan New Area， Nie Huhua， a professor of economics at Renmin University of China told Caixin， a Chinese financial news magazine， is to promote Hebeis economic and social development and help develop the Beijing-Tianjin-Hebei region into a world-class metropolitan area. “The area will boost the economy in the region surrounding the capital， where Beijings wealth and prominence have not spread，” Nie said.

Local job market

To prevent speculation on property in the new area， all real estate sales there have been suspended. The preparatory committee for the Xiongan New Area said it will continue to address inconsistencies in the trade and construction of houses and will work toward achieving a stable real estate market.

A 23-year-old Anxin local surnamed Lu still couldnt believe the news when he talked to ChinAfrica on April 4. “It is like a dream，” Lu said. “I came back to work in this county last year after I graduated from college， and I always complained how boring life is in this town. But now， it is like a big surprise， and Im looking forward to the huge changes that will come in the following years.”

Some locals， though， are keeping a cool head amidst the excitement. A 43-year-old Xiongxian local surnamed Liu expressed concern about his job at a plastics manufacturer.

“Im almost 100 percent sure that the plastics business will not be allowed in the future due to the pollution problem，” Liu said. “I have to find a new job. Im considering opening a small restaurant.”

This is the concern shared by many people in Xiongxian.

“I can say that every household has a connection to the plastics business，” said Li Xiaodou， Director of Hebei Packaging Association， during an interview with online media The Economic Observer. “Even though the new area plan will no doubt bring new opportunities for local development， the pollution caused by plastics enterprises cannot be solved within a short period.”

“I think the government will definitely call a stop to plastics production，” Li Gensheng， the owner of Huatao Plastic Factory in Xiongxian， said.

Li said these days， the government has been demanding that they stop production on smoggy days， and business is getting harder to do. “By then， I will sell the machines and switch to other business，” Li said.

New way ahead

On April 1， the Central Committee of the Communist Party of China （CPC） appointed Xu Qin， former secretary of the CPC Shenzhen Municipal Committee， who was also mayor of Shenzhen， to become deputy secretary of the CPC Hebei Provincial Committee. Many people expect him to make use of his nine years of experience in Shenzhen to aid the development of Xiongan.

However， Xiongan will not be able to compare economically with Pudong or Shenzhen in the near future， said He Lifeng on April 5.

Shenzhen took off on the back of neighboring Hong Kong. Pudong relied on Shanghais role as an international financial and trade center. Both the Pearl River Delta and the Yangtze River Delta were natural hot spots that were already home to manufacturers and big businesses. Xiongan and its neighboring areas in Hebei have no similar economic might. Instead， Xiongan may prove to be a place where the Central Government can focus on its experiments with urbanization， supply-side reform and even governance models.

Protecting the local ecology will be a priority， as the authorities do not want to repeat the outdated practice of “pollution first， treatment later.” People will live in a cleaner and safer environment.

Innovation will be the fundamental driver in building and developing the Xiongan New Area， and policies will be put in place to bring innovative elements to the area， said He.

Xu Kuangdi， head of the Expert Advisory Committee on the Collaborative Development of Beijing， Tianjin and Hebei， suggested that the construction of the Xiongan New Area should focus on technological and innovative industries and the region should attract high-end innovative talent and resources.

“Apart from having world-class urban planning， the architecture in the new area will also showcase Chinese cultural characteristics，” He said.

The new area together with Zhangjiakou - where the 2022 Winter Olympics will be held - are expected to become two driving forces for Hebeis development， He said.