China's Xiongan New Area kicks off new round of reforms

An aerial photo shows an array of villas near Baiyangdian in the Xiongan New Area in northern China's Hebei province, April 4, 2017. Photo: VCG

The Chinese national strategy of establishing the Xiongan New Area in the northern province of Hebei reminds people of the heated debates last century about whether to phase out some non-capital functions from Beijing with the deterioration of unban diseases.

With the strategy now in the pipeline, experts believe that the Xiongan New Area, which covers the counties of Xiongxian, Rongcheng and Anxin and is home to Baiyangdian, one of the largest freshwater wetlands in northern China, will serve as an experimental field for China's new round of reforms to promote the balanced development of Chinese cities.

Public revelry

My fellow townsmen in the county of Rongcheng were surprised by the county's inclusion into the Xiongan New Area, said Xue An (alias), who is a Rongcheng resident and works as a civil servant.

In the eyes of Xue, Hebei residents see the Xiongan New Area as a "big pie falling from the skies", as the province gets little benefit from its great contributions to Beijing's prosperity.

Xue revealed that Rongcheng county suspended land transfer business and banned trucks carrying cement and construction materials from entering the county more than a year ago. And after the news about the Xiongan New Area broke out on April 1, the local governments issued a series of policies to prevent a housing frenzy, but it could not stop outsiders from visiting the place for property purchase. Stocks related to the Xiongan New Area also rose sharply.

What's more, the establishment of the Xiongan New Area raises the popularity of a Xiongan hukou, because of which Xue's elder sister is no longer worried about her son's marriage. (In China, girls normally prefer to marry a man with a city hukou.)

Besides the masses, bureaucrats are also paying attention to the Xiongan New Area. Xue said that some of his classmates who work for government agencies had asked him about the career prospects and salary of an official working in the Xiongan New Area.

Debates about capital relocation

In the early 1980s, Wang Ping, a scholar, proposed that the Chinese capital should be moved to another place, setting off a debate over the relocation of the capital.

In 2007, a group of scholars headed by Mei Xinyu, a researcher at the Institute of International Trade and Economic Cooperation under the Ministry of Commerce, again mentioned the proposal, questioning if water-starved, densely populated Beijing could develop smoothly with the severe urban diseases such as pollution and traffic problems.

"If too many resources converge in Beijing, a growing number of people from other parts of China and abroad will swarm into the city for employment. It will clearly increase Beijing's environmental burden," Mei said at the time.

Role as sub-capital

The Chinese government has said that establishing the Xiongan New Area in Hebei province is a part of policies to advance the coordinated development of the Beijing-Tianjin-Hebei region, which is in accordance with Mei's previous judgment.

According to the official Xinhua News Agency, the Xiongan New Area will play a role as a "new home for Beijing's non-capital functions".

In this regard, foreign cities have rich experience that Beijing could learn from. For example, Japan built the Tsukuba Science City, which is located about 50 kilometers northeast of Tokyo, to relieve the burden of the capital.

"To some extent, the Xiongan New Area can partly serve as a sub-capital of China, which can help Beijing solve its urban diseases and other fundamental problems," said an economist from the Chinese Academy of Social Sciences, who refused to be named. The economist further pointed out that the Xiongan New Area will be helpful in separating politics from economy, which is good for avoiding corruption.

The establishment of the Xiongan New Area also heralds the implementation of China's new round of reforms, which will involve industrial upgrade, property adjustment and production capacity cut. These reforms can be carried out in the Xiongan New Area as an exemplary role, according to the economist.

At the beginning, the government will give a guidance for the basic construction of the Xiongan New Area, and then the development of the region will be more driven by market forces, said the economist, who described creating a balance between the government and market a "strategic art".

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