The government will build another metropolis from scratch. But it's not planning on following the old playbook.

Ma Tianjie of Foreign Policy reports on the planned development of a new mega-city recently announced by the Chinese government in one of Beijing's neighboring provinces. The hope with Xiong’an New Area is to create the kind of areas that Shenzhen or Shanghai's Pudong area have become, with non-governmental functions, including corporate headquarters, moving from the capital of Beijing to the new town. However, some critics see little hope of repeating the economic boom that transformed the "backwaters" of Pudong and Shenzhen into global financial hubs. The government is also struggling to curb wild real estate speculation in the designated new area.1

In a surprise move that caught most of China off guard, the Communist Party’s powerful Central Committee, along with the State Council, which functions as China’s cabinet, issued an April 1 resolution unveiling a planned Xiong’an New Area, which encompasses three existing counties in Beijing’s adjacent Hebei province. Development of the New Area will be phased: in the short term, a 38 square mile area, later doubling to about 77 square miles and, eventually, expanding to about 770 square miles, not much smaller than Tokyo.

That impressive size was not what generated the resultant awe permeating the Chinese Internet. Xinhua, the official news agency that carried the announcement, made it clear that this was not to be just another new special zone among an array of similar projects: “Xiong’an is a New Area that follows the path of Shenzhen and Shanghai’s Pudong New District. It is an initiative for the next millennium, a major event of national significance.”

By elevating Xiong’an to the level of Shenzhen, a megacity built out of a fishing village, and Pudong, a previously desolate area of Shanghai that now houses its signature skyline, Xinhua fanned anticipation for a project of historic proportions. In 1980, the opening of Shenzhen, at that time just a small village bordering Hong Kong, was the decisive moment of China’s policy Reform and Opening after the country broke away from the grip of Maoist ideology. In 1990, the decision to develop Pudong as China’s new window to world symbolized one of leader Deng Xiaoping’s last major efforts to give momentum to the reform that suffered major setbacks in the late 1980s. Joining the ranks of Shenzhen and Pudong would mean that Xiong’an would bypass its “older brother” in North China, the Binhai New Area in Tianjin, set up in 2005, as the heir apparent to China’s new style of reforms.


That reaction was evidently not what the designers of Xiong’an had wanted. Measures swiftly appeared to quench the apartment-hoarding fever and deter speculators. A freeze on any real-estate trade in the region was announced, which quickly escalated into the arrest and lockup of rogue traders, and resulted in bizarre scenes on the streets of Xiong’an, with police officers chasing after real estate agents.

Xiong’an’s planners are faced with the tricky task of managing not just expectation but also imagination. There is visible frustration over what the government sees as a small-minded, reductionist reading of the New Area as nothing more than a real estate play. Wild speculation is “debasing” to the leadership’s vision for the New Area, an article in state mouthpiece People’s Daily declared. The grand plan, it argues, is an ambitious strategy to explore a new way to overcome “megacity disease,” to achieve more balanced regional development and to nurture innovative engines of growth.

The article introduces a few novel terms to the lexicon of urban development. Besides “megacity disease,” it also highlights the primary role of Xiong’an as the receiving base for “non-capital functions” to be moved out of Beijing (pictured above). In case this is not clear, it specifies that such functions include anything that’s inconsistent with Beijing’s self-image as China’s capital, i.e. the political, cultural, international exchange, and technological innovation center of the country. Corporate headquarters and financial institutions therefore do not belong to the capital and should be relocated.