Xiongan New Area disclosed on Monday that it has established a State-owned company for the investment and construction of local infrastructure and other facilities, a major step toward creating a new economic zone in the area.

The company－China Xiongan Construction & Investment Group Co Ltd－was set up on July 18 in Rongcheng county in North China's Hebei province, with a registered capital of 10 billion yuan ($1.5 billion), according to the website of the National Enterprise Credit Information Publicity System.

It was approved by Hebei provincial government, which is also the only shareholder of the company.

Its chairman and general manager is Zhang Weiliang, who used to be an official in the government of Xiongan.

The company also has two other directors and six supervisors, the website showed.

With innovative investment and financing patterns, the company will raise funds including social capital to build in the area.

The projects involve the land development, constructing residential and commercial buildings, improving the environment and tourism development of Baiyangdian－a freshwater lake in the area, as well as building infrastructure such as transport links, energy and public facilities.

China announced its intention in April to set up Xiongan New Area, a planned new economic zone of national significance to help phase out some non-capital functions from Beijing.

It is located about 100 kilometers southwest of downtown Beijing and covers Xiongxian, Rongcheng and Anxin counties in Baoding, Hebei.

It will eventually cover 2,000 square kilometers.

Since Xiongan is new, the current transportation and commercial facilities in the area need to be improved, Zhang Gui, deputy head of the Research Center for Beijing-Tianjin-Hebei Development at Hebei University of Technology, said in a report by Beijing Business Today.

But to do this, the company will not just carry out the direct investment by itself; it will also help leverage more investment from social capital to promote the area's construction in various fields, Zhang said.

"In the future, private investment in Xiongan would possibly exceed 100 billion yuan, even reaching the trillion level," Chen Ji, a business researcher with the Capital University of Economics and Business, was quoted as saying by the report.

Before the establishment of the company, many enterprises made plans or wanted to participate in the construction of the area, such as China Railway Group Ltd, which has set up a subsidiary in Xiongan for participating in the construction of local infrastructure.