What are the economic zones in Beijing

A metropolis out of nowhere

Beijing has had positive experiences with the two economic zones of Shenzhen in the south and Pudong in the east of the country. Now a new location not far from Beijing is supposed to work new wonders.

When the bomb fell, there was no stopping many real estate agents and real estate developers. They got into their cars in early April and set out for the three counties of Anxin, Rongcheng and Xiongxian in Hebei Province, a little more than a hundred kilometers from Beijing. Previously, the central government of China had surprisingly announced that the new economic zone Xiongan is being built in the lagging region, which will one day relieve the Chinese capital, which is bursting at the seams. The real estate industry sensed big business. In the area south of Beijing, shortly after the decision was announced, all hotels were booked out in one fell swoop, according to the business magazine “Caixin”.

The real estate agents and real estate developers hit the ground running straight away: within a day, the purchase prices per square meter shot up by more than 230%. When life in the sleepy part of China was still going its leisurely pace, you had to shell out 6,000 yuan (Y) - the equivalent of 876 CHF - for one square meter of living space, and shortly afterwards the prices were already 20,000 Y (approximately 3,000 CHF). .

Beijing gets wings

There are a total of 19 economic zones throughout China, but the Chinese rulers attach particular importance to the project in Hebei Province. Party and state leader Xi Jinping had already warned in 2014 that Beijing should only have four central tasks in the future: The city, in which more than 20 million people already live, should be the center for politics, culture, international communication and research and development .

Less important tasks, on the other hand, should be outsourced. Part of the plan is for the Beijing municipal government to move east to Tongzhou. And in Xiongan, a city of millions is to be built, which will represent the former high-tech location with blue skies and fresh air. This will give Beijing two wings: Tongzhou on one side and Xiongan on the other.

There was great jubilation in the state media about the new flagship project, also because Xi Jinping is said to have personally selected the location. Xiongan was quickly compared to two other economic zones that represent the rapid economic upswing in the Middle Kingdom. At the behest of Deng Xiaoping, who had become a strong man after Mao Zedong's death in 1976, a project was launched in 1980 in Shenzhen, not far from Hong Kong. The region became a test laboratory to promote the conversion of the planned economy, which at that time was still based on the Soviet model, into a market economy. In 1980, the sleepy fishing village of Shenzhen in Guangdong Province was known to only a few Chinese. Less than forty years later, the metropolis on the Pearl River Delta is considered the leading industrial location in the country, which has overtaken the former British colony of Hong Kong.

Urbanization is advancing

And comparisons with Pudong could not be missing in the jubilant state media. On the former alluvial land, located opposite the promenade The Bund in Shanghai, there are now skyscrapers after skyscrapers. The area has become the financial center of mainland China.

The starting signal for the area, which is now more than 1200 km² in size, was given in October 1992 by the then party and state leader Jiang Zemin, who had his power base in Shanghai - and still does.

There are various reasons why the choice fell on the (still) nowhere location, which should initially be 100 km² and one day up to 2000 km². In future, Xiongan will be part of a triangle that will include Beijing in the north and the port city of Tianjin in the east. For some time now, the central government has been working on converting Beijing, Tianjin and Hebei Province into the “Jing-Jin-Ji” metropolitan region as part of its urbanization strategy; 130 million people will then live in this.

In addition, Xiongan is conveniently located in terms of transport. The Yellow Sea ports are easily accessible and the region is along the high-speed rail link that connects Beijing with Hong Kong. The major airport currently being built in the south-west of Beijing is also halfway between Xiongan and the Chinese capital.

In addition to the lower earthquake risk compared to other locations, Xiongan has another advantage. Not far from the area is the Baiyang Lake, the largest body of water in northern China, which otherwise in large parts suffers from a lack of precipitation. As a result, Beijing is increasingly tapping into the groundwater reserves - with as yet unforeseeable consequences for the environment. In addition, all buildings in Xiongxian County are heated exclusively with geothermal energy; the area is thus a pioneer in a nationwide comparison. However, the region also has to cope with a downer. The city of Baoding, not far from Xiongxian, suffers from unsustainable air pollution. In the past three years, it has ranked first twice and third once in the ranking of the cities with the worst air in all of China.

Region as a test laboratory

In the new Xiongxian area, into which, according to calculations by UBS in Hong Kong, up to CHF 600 billion in investments will flow over the next 20 years, this should end. According to the will of the Chinese rulers, with modern buildings and an intact transport system, it will become a showcase project in terms of environmental protection. The region should also stand for innovation and creativity and thus provide impetus for the economic restructuring of the Chinese economy. And as in Shenzhen and Pudong, Xiongxian will become a test laboratory. Structural and institutional reforms as well as new forms of foreign direct investment are likely to be tried out there. The rest of the country could then benefit from the experience.

It is still unclear who will settle in Xiongxian. Research institutes that work in the ministries' environment are under discussion. But the administrations of the large Beijing-based state corporations such as Petro China Sinopec, China National Oil and Gas Exploration and Development Corporation or the three telecom groups China Mobile, China Unicom and China Telecom could be candidates for a move to the new economic area and thus have a pull trigger. Even if the plans are still vague, the state news agency Xinhua is full of praise. It was the “right decision at the right time”, it read. Xiongan is more than a mere copy of the past Chinese success. Rather, the new region will tell the story of a new city, revels Xinhua in the highest tones.

Xiongan invites you to dream

While official China is full of euphoria, this is likely to have evaporated again within the real estate industry. After it had become apparent that prices would reach dizzying heights, the state took action and froze all previous deals. More than 70 real estate deals were closed and seven people arrested. The state media echoed the message from Xi Jinping, who, in view of the high real estate prices in parts of China, had already said that apartments are there for living and not for speculating.

Such warnings could not deter a 53-year-old resident who owns a small piece of land in Xiongan. Having already ruined a marriage and not a really good match with his rural hukou (China's residence control system), the boom gave him new hope. In an advertisement he let it be known that he was looking for a young woman, preferably not yet 25 years old, who should have studied in the United States or Great Britain.