Research Agencies to Lead Move to Xiongan, Planners Say

(Beijing) — Research institutes affiliated to government ministries will be among the earliest to move to China’s new economic zone that will rival those in Shenzhen and Shanghai, sources with knowledge of the matter told Caixin.

The Xiongan New Area, the 100-square-kilometer zone is expected to eventually expand to 2,000 square kilometers — nearly three times the size of New York — and is a key component of a massive “mega-region” developing around Beijing and neighboring Tianjin and Hebei. A host of investors have started flocking to the area after a surprise move by the government on Saturday, to turn three obscure counties in Hebei province — Xiongxian, Anxin and Rongcheng — into the next growth hub in northern China.

The government is considering setting up branch campuses of some of the top universities in the Xiongan zone, a person close to the urban planning department of Hebei told Caixin. Some villages around the new zone have already started preparing for demolition, he said.

Located 130 km south of Beijing, it is also expected to help ease population pressure on the capital. Key government departments, however, will stay in Beijing, said Wu Hequan, deputy chief of a consultancy group advising the government on the development of the zone.

“Theoretically, state-owned enterprises (SOEs) needn’t be located in the capital city, but this does not mean all of them must move to Xiongan. It requires a step-by-step approach,” Wu told Caixin.

The first batch of corporates that move into the new zone are likely be SOEs in the infrastructure and transportation sectors, such as those in construction, railway building, energy and power generation, Li Jin, chief analyst of China Enterprise Research Institute, told the government-backed Securities Daily.

A dozen SOEs have already announced their intentions to support, and benefit from, the mega-project. China Petroleum & Chemical Corp. (Sinopec) said it may expand its geothermal heating system, which currently covers all households in one of the three counties, to the entire area. A major railway and bridge builder China Railway Construction Corp. Ltd. (CRCC) said it will create a task force to investigate opportunities to support the development of the new economic zone.

The country’s top shipbuilder, China Shipbuilding Industry Co. (CSIC), has become the first state-owned enterprise to announce plans to relocate some of its businesses to Baoding, the nearest big city and administrative center that governs the three counties where the new economic zone will be set up.

The company said it will move its capital management subsidiary from Beijing to Baoding and establish a new ship and airplane building firm in the city in a statement on Friday.

CSIC already has a foothold in the area. In 2012, the company started developing a power supply research center and marine equipment industrial park in Baoding.

Contact reporter Coco Feng (renkefeng@caixin.com)