Why there?

Located about 100 km southwest of downtown Beijing, the new area, a plastics manufacturing center, had hardly registered on China’s economic map before. Even many people from the same province had never heard of the three counties before the news.

According to reports, the three counties, Xiongxian, Anxin and Rongcheng, had a combined GDP of about 20 billion yuan ($2.94 billion) last year, less than 1 percent of Beijing’s economic output.

The decision to establish the new area is part of a greater strategy, which China initiated in 2014, to jointly develop Beijing, the port city of Tianjin and Hebei Province to improve the region’s economic structure, environment and public services, and bridge the gap between the capital and the industrial and rural areas surrounding it.

The distance of the new area from both Beijing and Tianjin, the two major municipalities in north China, is about 100 km, the same as that from Beijing to Tianjin, which makes the interconnected area resemble an equilateral triangle.

He Lifeng, Chairman of the National Development and Reform Commission (NDRC), told Xinhua News Agency that transportation connections of the new area will be very convenient, with Beijing, Tianjin and Shijiazhuang, capital city of Hebei, all within a half-hour’s commute.

In addition the Baiyangdian Lake, the largest freshwater lake in north China, is located in the zone, which will make it ecologically healthy. The relatively less-developed economy in the region also offers developers plenty of room.

Beijing now is home to over 21 million people, and the number is expected to reach 23 million in 2020. Traffic congestion, soaring property prices and excessive burdens on resources are all severe “urban ills” of the huge capital. The root of these issues lies in the capital taking on too many “non-capital functions,” and Beijing has long been considering curbing population growth and relocating industries and other non-capital functions to Hebei in the coming years, said He.

Beijing will focus on its “capital functions,” which means serving as the country’s political center, cultural center, and center for international exchanges and science and technological innovation.

Another major task of the Xiongan New Area, Nie Huhua, a professor of economics at Renmin University of China told Caixin, a Chinese financial news magazine, is