China announced yesterday it would establish the XiongAn New Area in Hebei province near Beijing as part of measures to help ease pressures on the nation's capital and support coordinated development of the Beijing-Tianjin-Hebei region.
The news has sparked investment frenzy in the region, about 100 kilometers southwest of downtown Beijing, as property prices have spiked.
Hotels in the region are fully booked and people betting on future price appreciations swarmed in to buy apartment units in the area. There is no clear indication as to how much prices have increased as the market is so distorted with buyers far outnumbering sellers.
This is another new area of national significance after the Shenzhen Special Economic Zone and the Shanghai Pudong New Area, according to a circular issued by the State Council.
The XiongAn New Area will span three counties that sit at the center of the triangular area formed by Beijing, Tianjin, and Hebei's provincial capital Shijiazhuang. It will cover around 100 square kilometers initially and will be expanded to 200 square kilometers in the medium term and about 2,000 square kilometers in the long term.
It will help phase out functions unrelated to serving as the capital of the country from Beijing, which has 21.5 million people, and explore a new model of optimized development in densely-populated areas.
The removal of non-capital functions from Beijing has been ongoing for years and geared to help manage population growth in the capital, as well as skyrocketing property prices, highly constrained education and healthcare resources in Beijing.
The Xiongan New Area encompasses the counties of Xiongxian, Rongcheng and Anxin, and is home to Baiyangdian, one of the largest freshwater wetlands in north China.