A new area of experiments and hopes

Apt test case for new normal

Apart from accommodating the “non-capital functions” of Beijing, Xiongan New Area can also explore a sustainable development path that strikes a balance between maintaining economic growth and curbing property prices, as well as protecting the environment — which, in other words, is the new normal of moderate but sustainable and ecofriendly economic growth.

Besides, it is not proper to compare Xiongan New Area with Shenzhen Special Economic Zone, established in the 1980s, or the Shanghai Pudong New Area, set up in the 1990s, in terms of just potential economic output. Xiongan New Area has a wider range of goals which include studies to find ways to cure the “urban ills”, transform the economic structure and implement a new pattern of urbanization. Since the yet-to-materialize new area will eventually cover 2,000 square kilometers — from 100 sq km in the initial period — it will be large enough to explore ways of solving the problems faced by cities and optimizing development in densely populated areas.

Strengthening public resources and building infrastructure facilities that support the growth of cities will be given priority to improve communication between the new area and the cities around it. Jingjinji Intercity Railway Investment Corporation, co-financed by the governments of Beijing, Tianjin and Hebei province and China Railway Corporation, has already been officially launched. So it’s possible that work on the intercity railways would start soon.

And once hospitals, branches of universities and scientific research institutions are established in, and Stateowned enterprises move into the area, they will attract a resourceful and efficient talent pool, as well as more workers to Xiongan. Nie Huihua, vice-president of the National Academy of Development and Strategy, Renmin University of China

Pilot project for property tax

For infrastructure construction in Xiongan New Area, public-private partnerships may be a good way to involve the private sector to build and/or improve infrastructure facilities and thus reduce the pressure on the government to keep on injecting capital to establish the new area.

Aside from individual operation of infrastructure projects, an integrated development model is also a good choice for streamlining overall urban planning.

However, a potential risk in encouraging PPPs to build public infrastructure is that it will increase the government’s burden of management, because the relationship between the local government and the companies in charge of construction will be totally dependent on contracts and economic ties. So before applying this mode, local authorities’ capacity should be carefully evaluated.

Xiongan New Area also offers a good chance to launch pilot projects for collecting property tax on residential properties used for commercial purposes. It’s highly possible that the local authorities will make efforts to offer affordable and low-rent housing to attract more talents and provide good living conditions for the residents, but they cannot control the entire local property market. So houses used as commercial properties will continue to be a part of the local real estate market, making it possible to launch the pilot property tax project. And if the pilot project is successful, it will open another channel of revenue for the local authorities and thus reduce their dependence on the sale of land-use rights to earn revenues. Yang Yongheng, associate dean of the School of Public Policy & Management, Tsinghua University

Clear industry structure needed

There has been much public debate on Caofeidian district in Tangshan of Hebei province, which is a traditional heavy industry base grappling with overcapacity. But it is too early to call it a failure, because true regional development is possible only in the long term. Experience tells a clear industrial structure should be built and a singleindustry structure should be avoided. And since resourceintensive industries alone can no longer play the pivotal role in economic development, the industrial structure should be more diversified and attempts must be made to build a comprehensive industrial chain.

Therefore, the choice of pillar industry for the development of Xiongan New Area should be made in accordance with the trend of global industrial development and China’s overall strategic plan.

Officials have already emphasized that “the new area will create a favorable environment for innovation” and attract innovative talents to help build it into a “high ground” for innovation and a new science and technology city. So traditional heavy industries should not be shifted to or set up in the new area on a large scale, modern service industries should be encouraged to play the leading role, and a smart ecological system must be built in the area.

A valuable lesson that can be learned from the Shenzhen Special Economic Zone and the Shanghai Pudong New Area is that institutional innovation should play a strong supportive role in the initial stages of Xiongan New Area and, as it matures, the market should play the leading role in the distribution of social resources. Li Guoping, Department of Urban and Regional Management, School of Government, Peking University

Use advantage in agriculture

Xiongan should capitalize on the advantage the area enjoys in agriculture. Xiongan new Area will eventually cover the whole of Baiyangdian, one of the largest freshwater wetlands in North China, which has more than 140 lakes covering 360 square kilometers. And Anxin county, which is home to 85 percent of the wetlands, is the largest base for fishery products in northern China. With a population of 390,000, Anxin county has a GDP of more than 4 billion yuan ($580 million).

Given these objective conditions, Xiongan New Area should maintain its core competitiveness in agriculture, which will be in line with the central government’s call for deepening supply-side structural reform in the agriculture sector. Industry upgrading and exploring diversified patterns of developing agriculture could be a possible direction for the next move — of promoting agricultural tourism and eco-agricultural park while improving the ecology of large areas of freshwater wetlands that might be suffering from pollution.

If more incentive policies are formulated to attract large-scale companies, institutions and universities, which in turn will draw more professional talents, it will boost the sustainability of the local agriculture industry and thus create more jobs, prompting migrant workers to return and even start their own businesses. Liu Ying, research fellow at Chongyang Institute for Financial Studies, Renmin University of China