The announcement on the weekend before last of a new city-by-fiat about 100 kilometers (62 miles) southwest of Beijing called the Xiongan New Area (雄安新区 xióng ān xīnqū) caused an immediate real estate boom, swiftly followed by a suspension of property purchases to stop speculation. The ban on housing sales did not cool investor enthusiasm for listed companies connected to the area. Further details emerged that among the first organizations to move to the new city will be research institutes affiliated to government ministries that are currently located in Beijing.
Xiongan continues to attract attention from investors and media. The South China Morning Post says it may become “China’s biggest public works project, ever.” Bloomberg calls it a “$290 billion dream to turn backwater into a new Shenzhen.” The SCMP report notes a Morgan Stanley analysis that estimates Xiongan could end up attracting four to eight times as much investment as the Beijing Olympics. Bloomberg, meanwhile, quotes an investor who expects that “in five years, Xiongan New Area is going to be the most high-end tech center.”
High expectations for Xiongan are being guided by state media, as a top headline in the People’s Daily declared (in Chinese) Xiongan to be part of a “large-scale project to last a millennium,” overseen directly from the “core” authority of President Xi Jinping. However, a large portion of the project seems directed toward a short-term goal — stimulating the steel industry — while eschewing its stated long-term goal of building a “green” city.
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