Xiongan a new growth pole for China

On April 1, the Central Committee of the Communist Party of China and the State Council, China's Cabinet, jointly announced the Xiongan New Area will be established in Hebei province. The new zone, located about 100 kilometers south of Beijing, will house the offices and facilities that are not related to the capital, and thus offload some of Beijing's "non-capital functions". It will also create a new model of optimized development in densely populated areas and restructure the urban layout of the Beijing-Tianjin-Hebei region.

The Xiongan New Area, according to the announcement, is a historic and strategic choice, and being similar to the Shenzhen Special Economic Zone in South China's Guangdong province and the Shanghai Pudong New Area in East China, it will serve as an economic engine and advance the coordinated development of the Beijing-Tianjin-Hebei region.

In fact, the Xiongan New Area has greater potential than the Shenzhen and Shanghai zones. It will start as an 100 sq km zone, and in the long run cover 2,000 sq km - an area larger than that of the Shenzhen SEZ's 1,900 sq km and the Pudong zone's 1,700 sq km. And being close to Beijing, the new economic zone will enjoy incomparable geographical advantages.

More important, Xiongan will develop according to the central leadership plans, and enjoy a high administrative level than neighboring cities.

About 5 million people live in relatively poor economic conditions in areas surrounding Beijing. The establishment of North China's New Area will help them move across the Beijing-Tianjin-Hebei region, and accelerate the formation of a national level growth pole.

The leading officials for the Xiongan New Area, too, have been carefully selected to boost its growth. Xu Qin, former Party chief of Shenzhen city, was appointed deputy Party chief of Hebei province on April 1. And Yuan Tongli, Party chief of the preparatory committee of Xiongan New Area, used to serve in the Binhai New Area of Tianjin municipality. These officials will use their experiences of serving in other development zones to help the Xiongan New Area achieve its goals.

But to help the new area realize that, the State needs to provide it with further policy support.

Xiongan's current population is only 300,000, and its local GDP is about 20 billion yuan ($2.9 billion) and financial income a few hundred million yuan, which are small compared with the giant strategic plan. Which means more investment is needed to help the zone meet the entire nation's expectations.

Some attribute the Shenzhen and Pudong zones' success to the fast pace of China's manufacturing industries at the time. But with the opposition to globalization in many countries and weak global economic recovery, Xiongan faces greater challenges.

All this makes it even more important for Xiongan to get better policy support from the government. Beijing, for instance, can do a lot in rendering such support. As China's political, economic, cultural and technological center, Beijing can help Xiongan develop industries that are complementary to its own, so that the latter can develop fast and pay back.

To truly transform Xiongan into a new growth pole, the new development area and capital need to work together.

For Xiongan New Area, a very important job is to first optimize local governance structure, so that the potential of the enterprises can be realized. And if Xiongan can attract national and global enterprises to develop and prosper, it will indeed achieve success.

The author is a professor at Chinese Academy of Governance.