New zone's castles in the air

Editorial | 10 Apr 2017

Beijing's designation of Xiongan as a new special zone to provide backup to the capital has unleashed a frenzy in which nearly everything however remotely related to it is subject to intense speculation.

It's no wonder mainland comrades are said to be more capitalistic than their counterparts in the West.

Cash-loaded investors are flocking to the new hot spot hoping for a slice of the pie. Discovering the freeze imposed on the local property market, they venture to the outer areas in search of acquisition targets.

So where exactly, if not Xiongan? At least one local real estate agent was witty enough to suggest "Beijing" - about 100 kilometers away.

The April 1 announcement had led some to hesitate and think it might be just another April Fools' Day prank. They should be forgiven for the caution shown, as the so-called Xiongan New Area had previously been unheard of - not only to Hong Kong people, but many mainlanders too.

Of course, Xiongan residents couldn't be happier, hailing the news as manna from heaven. Officially, it's known as "the strategy crucial for the next millennium."

It sounds big, right?

In China, exaggeration is commonplace, such as in official propaganda material. The word "millennium" may be too ambitious a term for the context, but it does signify the plan to turn Xiongan into a new special region is a new policy focus for President Xi Jinping after his "Belt and Road" strategy.

Ahead of the Communist Party's 19th National Congress later this year, Xi is under pressure to produce a plan to enrich his report card for his next term, after cracking down hard on corruption during the first term.

Having centralized power, it's high time to push for economic reforms in the next stage.

Official media likens the future Xiongan to Shenzhen, Tianjin and Pudong. But they aren't the same.

Xiongan is like a piece of white paper without the economic footprints that official media claimed to have been successfully implemented in other special zones. Xiongan may be the place for Xi to test his economic model that, if satisfactory, will likely be applied throughout the country to drive the president's legacy.

Skeptics may ask: why will Xiongan be different, when there are 17 special zones - each established to test new ideas and reforms?

That's a valid question, although Xiongan is being ballyhooed as the extension of Beijing. Bear in mind that when Shenzhen was designated as a special economic zone during China's "reform and opening up" period, it had Hong Kong to rely on for investment, and most of its factories were then relocated from Hong Kong.

The country has marched a long way from what it had been. But the Xiongan experiment will have to start from an elevated point, and this will prove tougher.

If Shenzhen and Pudong have thrived on the blessings of late leader Deng Xiaoping and former premier Zhu Rongji, respectively, it remains to be seen if Xiongan can similarly prosper on Xi's blessing.

For the time being, the place remains little more than a concept for speculation.

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