Xiongan district becomes hot property in China

China plans to build new city nearly three times the size of New York  The Guardian

A hitherto anonymous region near China’s smog-choked capital has been overrun by house buyers after Beijing unveiled “historic” plans to build a new city there in a bid to slash pollution and congestion.

Plans for the Xiongan New Area, a special economic zone that authorities say will eventually cover an area nearly three times that of New York, were announced by the Communist party’s top leaders on Saturday with a flurry of government propaganda.

In a joint statement two of China’s most powerful political bodies, the central committee and state council, described the new city, which will straddle three counties about 100km southwest of Beijing, as “a strategy crucial for a millennium to come”.

Official news agency Xinhua said Xiongan’s creation would reduce pressure on China’s car-clogged, 22 million-resident capital, and “usher in a new chapter in the country’s historic transitioning to coordinated, inclusive and sustainable growth”.

“Xiongan will be an answer to China’s growth conundrum: breakneck urban sprawl must give way to a balanced and inclusive development strategy,” Xinhua added in a breathless commentary trumpeting the mega-project.

President Xi said the city would be “a demonstration area for innovative development … [which] should prioritize ecological protection [and] improve people’s well-being.”

Bargain hunters reacted immediately to the hyperbole, flocking to the region in their droves to hover up homes they hoped to resell for huge profits.

Local media reports claimed property prices nearly doubled in the hours after the surprise announcement.

Bloomberg reported that the scramble for property caused gridlock on roads leading into the area while local hotels were flooded with guests.

Local estate agents were forced to close on Monday after the government introduced an emergency sales ban in response to a surge in interest. Reuters said officials took to the streets with loudhailers to shout warnings against illegal property speculation.

The online frenzy was such that propaganda officials reportedly ordered Chinese websites to “to control negative commentary related to the establishment [of the new city]”.

The buzz surrounding Xiongan stems from the very public backing it has received from China’s leaders. CGTN claimed there were signs the city would become “China’s next Pudong”, a reference to Shanghai’s skycraper-packed east-side which was farmland just a few decades ago.

State media also compared the new city to Shenzhen, a wealthy southern mega-city near Hong Kong that was the springboard for the game-changing economic reforms introduced during the 1980s by former leader Deng Xiaoping.

 

Xiongan district becomes hot property in China  BBC

A sleepy district in Hebei province has suddenly become the centre of China’s latest property craze and the talk of the country.

Over the weekend, investors flocked to Xiongan in droves, while online it has been the subject of social media buzz.

It all began on Saturday when the Chinese government announced the location of a special economic zone (SEZ) which would effectively serve as an extension of Beijing.

The capital has been grappling with overcrowding, heavy pollution and congestion caused by a booming population, and officials are trying to relocate industries and encourage people to live further afield.

Called Xiongan New Area, the 100 sq km (38.6 sq mile) zone is expected to eventually expand to 2,000 sq km – nearly three times the size of New York – and is a key component of a massive “mega-region” developing around Beijing, Tianjin and Hebei.

So when authorities confirmed its location in Xiongxian and Anxin counties, south of Beijing, investors wasted no time. Hundreds of property punters descended on the area immediately after the announcement.

Locals saw their normally quiet streets flooded with cars bearing Beijing and Tianjin licence plates, while hotels were completely packed out, according to local media.

Homeowners were overjoyed to find themselves sitting on potential goldmines, with their property value skyrocketing overnight.

Alarmed by the rocketing prices, the government moved in on Sunday to burst the nascent property bubble by suspending all new sales in the region.

It also imposed strict regulations on who could develop and sell property in the area, as well as restrictions on residential permit registrations.

Chinese authorities have struggled to contain the fervour of their vast pool of investors, who traditionally consider property a sure bet and who have fuelled spiralling prices.

Government curbs introduced earlier this year did little to stop property sales by area rising by 25% in January and February, compared to the same period last year.

Xiongan, it seems, is yet another chapter in China’s obsession with property.

 

Within Hours, Plans for a Quiet Corner of China Send Home Prices Soaring  NYT

A residential and industrial area roughly 80 miles south of Beijing once barely registered on China’s economic map. Consisting mostly of apartment buildings, villages, wetlands and empty fields, it has primarily been known for its donkey burgers—sandwiches with roasted donkey meat, which tastes something like pastrami.

But now the area around Xiongxian County has become another example of the frothiness and unpredictability of the Chinese property market.

On Saturday, China declared that an area that sprawls across three local counties will someday become Xiongan New Area, a gleaming economic powerhouse reminiscent of earlier developments that helped put China’s economy on its fast-growth trajectory. When completed, it will cover nearly 800 square miles, offer favorable regulation to businesses and become a modern urban area crucial to redeveloping the Rust Belt around Beijing.

Almost immediately, speculators pounced, setting off a property buying frenzy and sending shares of construction companies soaring. It has been such a chaotic market that local authorities have been forced to freeze purchases and close real estate offices. Chinese social media showed photos of new property developments and real estate offices with signs saying they had been temporarily closed.

The price spikes have been fast and furious.

In declaring its intent to build Xiongan, the Chinese government invited comparisons to the southern city of Shenzhen and the Pudong area of Shanghai. Shenzhen was part of China’s earliest experiments with private enterprise after the death of Mao Zedong, and it remains one of the richest parts of China. Pudong, home of many of the gleaming skyscrapers that define Shanghai’s skyline, became one of China’s most successful and high-profile development projects.

Xiongan will become “a demonstration area for innovative development,” Xi Jinping, China’s president, told the official state media.

Xiongan also fits into China’s grand plan to create a vast urban area uniting the capital city of Beijing with the nearby port city of Tianjin and with Hebei Province, the industrial province between them. Called Jing-Jin-Ji, the area — which would include Xiongan — will become a hive of economic activity that is intended to replace Hebei’s dependence on smokestack industries like steel and put the region on a path to rival Shanghai and Shenzhen.

 

China to launch special economic zone in province hit by layoffs  CNBC

China is establishing a new special economic zone in Hebei, a northern province that has been hit by massive job layoffs, in an effort to boost domestic growth.

The Xiongan New Area, about 100 kilometers from Beijing, will house “non-capital functions” moved from the capital city. This is part of a wider initiative to support the economy, and to integrate Hebei with the capital city and nearby Tianjin, according to state media.

Beijing is maneuvering economic growth away from manufacturing toward services, and developing Hebei — ground zero for the transition — is one step in that direction. The province is the main hub for iron and steel production, two sectors that have been hit with massive overcapacity cuts and millions of layoffs, and transforming it successfully could pave the way for the next phase of growth.

China has a long history of establishing special economic zones — with varying degrees of success.

Ones that have fared better were in Shenzhen and Shanghai. Established in 1980, the Shenzhen special economic zone helped jumpstart reforms and turned the fishing village into today’s manufacturing and high-tech center, while the Pudong area in Shanghai is now a major financial center.

Another goal with the Hebei zone is to help alleviate urban issues in Beijing, according to state media. Beijing’s population has exploded over time to 22 million, close to that of Australia, increasing pollution and traffic in the city. Still, no specific details have yet been publicly laid out, especially concerning pollution — Hebei itself is already quite polluted, and developing the Xiongan area could potentially pose more environmental risks.

 

China Plan to Create New Shenzhen Spurs Speculative Rampage  Bloomberg

It didn’t take long for news that China would set up an economic zone near Beijing to touch off an investor frenzy.

Within 24 hours of Saturday’s announcement that the government would create the Xiongan area in Hebei province — in the same spirit that Shenzhen and Shanghai’s Pudong was built –– hordes of prospective buyers had thronged to the region. Highways were clogged as they came to purchase real estate, with some camping outside property agent offices overnight, according to local media reports. On Sunday the government banned all property sales in the zone to stem speculation, according to the National Business Daily.

On Monday, shares of Chinese cement, building and port-related stocks surged in Hong Kong amid optimism the decision will spark a flurry of construction activity. The move by President Xi Jinping, is seen as a historic milestone to power China’s growth for a “millennium to come,” the official Xinhua News Agency reported. The new zone is expected to eventually cover about 2,000 square kilometers (772 square miles) and jump-start China’s economic growth.

The regional plan has been termed a ‘1000-year project’; the first of its kind since Mao.”

Shares of cement company BBMG Corp. surged as much as 46 percent in its biggest gain since July 2009. Tianjin Port Development Holdings Ltd rallied 16 percent and China National Building Material Co. advanced 7.4 percent. Mainland Chinese markets are closed for a public holiday and reopen on Wednesday.

Investor euphoria surrounding the plan may cause a headache for authorities, who have vowed to crack down on speculative buying frenzies spanning stocks to real estate. President Xi and his policymakers have pledged to curb excess leverage in the financial system and have committed to enforce prudent and neutral monetary policy to deflate bubbles.

Soaring home prices cities such as Shenzhen, Beijing and Shanghai have prompted authorities to impose restrictions to cool the market. China’s central bank last month asked banks in Beijing to scrutinize home loans to newly divorced couples and funding sources for borrowers, adding to other curbs to cool the market.

Beijing has been suffering from pollution and traffic congestion with heavy smog prompting more than 60 cities across China, including the nation’s capital, to issue health alerts this year. Beijing’s city government’s plans to spend 18.2 billion yuan ($2.6 billion) to tackle air pollution in 2017, Xinhua reported in January.

 

China to establish new economic zone near Beijing   ABC

China announced Saturday that it is going to establish a special economic area in a province neighboring Beijing as part of a plan to integrate the capital with its surrounding areas.

The government says the Xiongan New Area in Hebei province will have national significance like the Shenzhen Special Economic Zone, China’s first free-market economic zone set up in 1980 as the country was beginning economic reforms, the official Xinhua News Agency reported. The creation of the new area is a “major historic and strategic choice,” Xinhua said, citing a circular issued by the Communist Party’s central committee and China’s Cabinet.

The Xiongan New Area will eventually cover 2,000 square kilometers (772 square miles) and be located about 100 kilometers (60 miles) from downtown Beijing.

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