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Economy

China to build massive city southwest of Beijing

Xi-led initiative follows in steps of past leaders

Chinese President Xi Jinping, left, has repeatedly maneuvered to solidify his political footing.

BEIJING -- China has decided to create a new metropolitan zone in Hebei Province as part of a broader plan to coordinate development of the area near Beijing and Tianjin.

The Xiongan project, overseen by President Xi Jinping, is "another new area of national significance after the Shenzhen Special Economic Zone and the Shanghai Pudong New Area," the Xinhua news agency reported in citing a circular issued by the Communist Party of China and the State Council. The Shenzhen and Pudong developments were initiated by past "core" leaders Deng Xiaoping and Jiang Zemin, respectively.

The decision is "a major historic and strategic choice made by the CPC Central Committee with Comrade Xi Jinping as the core," according to the circular quoted by Xinhua. The timing of the move suggests that Xi, who was designated a "core" leader last autumn, may be seeking to consolidate power ahead of the party congress later this year when many senior leadership positions will be reshuffled.

The Xiongan New Area is roughly 100km southwest of Beijing and 100km west of Tianjin. The initial stage of development involves 100 sq. kilometers, with plans to eventually expand to 2,000 sq. kilometers. "Some non-capital functions" from Beijing would be transferred to the new area, according to Xinhua, though no timetable has been given.

One proposal envisions moving research and development activities there to create a city known for innovation, according to sources familiar with the matter. Another plan involves moving numerous state-owned enterprises. These steps aim to alleviate the crunch on Beijing and reconfigure the urban layout of the triangular area bounded by the capital, Tianjin and the new city.

Yuan Tongli, vice governor of Hebei Province, has apparently been tapped to oversee construction of the Xiongan zone. He previously led a redevelopment project in Tianjin. And the Communist Party recently transferred Xu Qin, who had served as Shenzhen mayor, to a senior party position in Hebei Province, underscoring the Xi leadership team's focus on bringing in experienced hands.

Meanwhile, Chinese media report that real estate prices in the area have doubled to tripled in the past few years, raising the specter of illicit transactions based on inside information. Home sales have been suspended, and a ban imposed on shipping construction materials.

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