China has announced that it will develop a special economic zone (SEZ) in one of the sleepy districts of Hebei province. This new SEZ, which will be located nearly 100 kilometers away from capital Beijing, is expected to revitalize the sluggish economy and minimize the burden on the over-populated city.

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The new SEZ is essentially an extension of Beijing and will be called Xiongan New Area. It is spread across merely 100 square kilometers (38.6 sq mile), which will be steadily expanded to 2,000 sq km to create a massive economic zone.

Chinese state media quoted President Xi Jinping saying that Xiongan would be developed to world class standards, with a focus on ecological protection and well-being.

Announcement About SEZ Propels Real Estate Prices  

Since the announcement, Xiongan has become the new real estate hotbed of the country. Scores of investors have reportedly flocked to get a look at the region which is likely to become a real estate goldmine within a few years.  

Residential and commercial prices in the nearby counties have started zooming up, according to The Global Times. Jokes have also been swirling on social media about how the property boom has suddenly made Xiongan men among the most desirable in the country.

Meanwhile, the Chinese government wants to ensure that the maddening race to sell and buy properties does not lead to a huge real estate bubble. The government has imposed regulations on who can develop and sell properties in the region, as well as residential permit registrations.

Revitalizing the Economy

Hebei province has been most badly hit by the economic slowdown, with millions losing their jobs due a to nationwide drive to impose cuts on steel and iron ore overcapacity. Over the years, the steel and iron ore sectors have been a major contributor to employment in Hebei province.

There is a growing consensus among Chinese policy makers that China needs to transform itself from a manufacturing into a service sector-based economy. The decision to develop the Xiongan SEZ is seen as a part of this economic transition.

The new SEZ is also expected to help Beijing solve some of the grave urban issues that have come to forth as a result of the growing population. The population of Beijing is currently estimated to be 22 million, and this has given rise to monumental issues like traffic jams and air pollution.   

TagsSEZ in China, Special Economic Zone, china, Hebei Province