China stepping up efforts to curb property speculation in new economic zone

A government seal blocks the gates of a development in Hebei province after an order banned new property sales in a special economic zone there. Photo: Jason Lee/Reuters

Local authorities are stepping up efforts to stop property speculators from pushing up the house prices in a newly earmarked special economic zone in Hebei Province.

All three counties, Xiong, Anxin and Rongcheng, of the Xiong’an New Area held meetings on Sunday, one day after the announcement of the establishment of the special economic zone and told the public that they would regulate the local housing market to curb property speculations in the new area, about 100km south of Beijing.

The Xiong county even ordered a freeze on all property sales in the county and imposed restrictions on residential permit registrations by non-locals.

The move came after the central government announced on Saturday that Xiong, Anxin, and Rongcheng counties would be developed into a new district to rival the Shenzhen Special Economic Zone and the Shanghai Pudong New Area.

The announcement drew a large number of homebuyers from across the country to flood into the area in hopes of buying property to resell in the future at a higher price during the three-day Qingming festival.

The prices for second-hand houses in Xiong county doubled from around 3,000 (around $435.7) and 4,000 (around $580.9) yuan per square meter to around 8,000 yuan (around $1161.8) per square meter during the holiday, according Chinese media.

On Monday, officials from all the three counties in the new area, Xiong, Anxin, and Rongcheng county, held a meeting in Rongcheng county to study the plan for the special economic zone and one of the topics for the meeting was to prevent property bubbles caused by speculators, according to The Paper.

The inspection on property market in the area also targets real estate agencies. 71 house selling departments and 35 real estate agencies have been ordered to shut down, and 10 real estate companies were suspected of  malicious speculation, local media reported on Wednesday.

The special economic zone district is expected to initially cover 100 square km and will be expanded to 200 square km in the mid-term and about 2,000 square km in the long-term, according to the announcement.

A “major historic and strategic choice made by the Communist Party of China (CPC) Central Committee and the State Council with Comrade Xi Jinping as the core," the district is expected to integrate the development of Beijing, Tianjin and Hebei and to phase out many non-capital functions in Beijing so as to curb “urban ills,” such as traffic congestion and air pollution in the city.

Xi chose the area after an inspection tour of Hebei province in February, during which he called for “world vision, international standards, Chinese characteristics and high goals" in the planning and construction of the area, according to Xinhua News Agency.

He said the area should prioritize ecological protection, improve people's well-being as well as protect and carry forward Chinese traditional culture.

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