Beijing could use Xiongan zone to test new reforms

Updated 2017-04-05 09:00:29 Global Times

Zone a 'new engine' to counter regional conflicts of interests

The newly announced Xiongan special zone could be used by China's central government to test new reform measures amid the economic slowdown, analysts said.

China on Saturday announced the establishment of the Xiongan New Area spanning three counties - Xiongxian, Rongcheng and Anxin - that sit at the center of the triangular area formed by Beijing, Tianjin and Shijiazhuang, Hebei's capital.

The new zone enjoys the same status as the Shenzhen Special Economic Zone and the Shanghai Pudong New Area, and is “a strategy crucial for the next millennium,” according to the Xinhua News Agency.

Shenzhen and Pudong are China's successful test beds for reform and opening up.

Senior Hebei Province officials headed by Party chief Zhao Kezhi inspected the zone on Monday and Tuesday. Zhao was joined by Xu Qin, former Shenzhen Party chief and newly appointed vice Party chief for Hebei on Saturday.

Zhongtai Securities chief economist Li Xunlei wrote in a research note on Tuesday that setting up the new zone at a time when the growth of the Chinese economy is at its slowest in 25 years shows the central government's commitment to new ideas.

Though the new area won't enjoy the kind of growth experienced by Shenzhen and Pudong, it could be used to test the central government's new ideas and reform measures, away from vested interests in Beijing. If these reform measures are successful, they could be promoted nationwide, Li said.

Key to the region

The coordinated development of the Beijing-Tianjin-Hebei (Jing-Jin-Ji) region is challenging and the new zone will be key, Tian Yun, director of the research center at the China Society of Macroeconomics, told the Global Times on Tuesday.

“In the Jing-Jin-Ji areas, we have a capital, a key municipality and a provincial government. The area reflects the most diversified political landscape in China, with all sorts of administrative barriers and vested interests,” Tian said.

“A two-hour drive from downtown Beijing will take you to some of the poorest villages in the country,” Tian noted.

Because Jing-Jin-Ji region integration is slowed by conflicts of interests, the need to achieve more balanced development and poverty alleviation becomes more urgent, so the new zone is set up to spearhead reforms. Hence, it is considered crucial for the next 1,000 years, Tian said.

The three counties in the new zone had a combined GDP of about 20 billion yuan (.94 billion) in 2016, less than 1 percent of Beijing's economic output, reports said.

The new zone will have a high starting point, optimize the layout and spatial structure of the Jing-Jin-Ji area, explore a new development mode of a high population density area and forge a new engine of innovation-driven growth, He Lifeng, chairman of the National Development and Reform Commission, told the Xinhua News Agency in a report published on Tuesday.

By a top-down design, the new zone could provide a model for reforms, Tian said.

“By starting on a piece of 'new land,' developers could enjoy the benefits of low costs, and have more freedom to explore new methods,” Ni Pengfei, a researcher at the Chinese Academy of Social Sciences and an expert on city competitiveness studies, told the Global Times Tuesday.

Ni noted that containing real estate speculation and planning secrecy is aimed at preventing opportunities from being exaggerated.

Urban 'disease'

With a population of over 21 million, Beijing already suffers from urban ills, such as traffic congestion, skyrocketing home prices, air pollution and resource depletion, because the city is shouldering too many non-capital functions, He said. He said that the new zone would accommodate Beijing's non-capital functions.

Ye Tanglin, a professor at the Capital University of Economics and Business, said institutions performing administrative duties under the central government could be the first entities to move into the new zone.

It would take a generation to develop, as the new zone will not likely attract married middle-aged people who own homes in Beijing, Ye said.

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