Apr 14, 2017 07:37 PM

Hebei Seeks Support for New Banks, Insurers to Be Branded ‘Xiongan’

(Beijing) — The government of Hebei province wants to create 10 financial institutions to serve the fledgling Xiongan New Area and give them a “Xiongan” branding edge. But critics say the step isn’t necessary because plenty of established banks have announced plans to move in.

The idea of setting up a network of Xiongan-branded financial institutions was leaked earlier this week.

According to the leaked document, the Hebei government also wants to ask the China Securities Regulatory Commission (CSRC) to treat companies located in the Xiongan area favorably by opening a “green channel” to fast-track their applications for a stock listing, for example.

Neither the CSRC nor the other two regulators for banking and insurance industries, whose attitudes play a key role in determining whether many of the goals can be achieved, responded to the proposals after the document was leaked.

Many established institutions, including big state-owned banks for example, have already announced plans to set up regional headquarters in the area.

The document, dated April 11, shows that Hebei wants to take “financial measures beyond conventions” to support the development of Xiongan, an economic zone about 100 km south of Beijing, which was launched this month to help alleviate Beijing’s urban problems such as pollution and traffic jams.

State media has described the new zone as being as significant as the Shenzhen Special Economic Zone, north of Hong Kong, and the Pudong New Area, in the coastal metropolis of Shanghai. The hope of the central government is that the new zone will take over some of Beijing’s “non-capital functions,” including commercial business and education.

The document laid out several goals that Hebei wanted to achieve by seeking central government support. They include setting up at least 10 institutions to provide comprehensive financial services, which would include a bank, a trust company, a securities firm, a fund company, an asset management company, insurance firms and a trading center for equities of unlisted firms.

All of these companies, as the document specified, would include “Xiongan” in their name to highlight their uniqueness and importance to the economic zone. It also appeals for regulators’ support for consolidating local rural credit cooperatives to establish Xiongan Rural Commercial Bank.

Critics have questioned the wisdom of building additional financial institutions, considering that many established organizations have announced plans to relocate their respective offices or shift their regional focuses to Xiongan.

Institutions that have lined up to support Xiongan’s development include some of the country’s biggest banks, such as the Industrial and Commercial Bank of China, China Construction Bank and China Development Bank. The Agricultural Development Bank, a policy bank, has promised to set up a fund of 100 billion yuan ($14.5 billion), with 80% of the capital coming from itself, to develop infrastructure in the new economic zone.

There is no reason to believe that Xiongan would need brand new institutions to provide financial services, said an expert who has been following the situation closely.

Besides, rushing to launch so many new financial companies at a time as well as seeking preferential treatment for local enterprises risks letting unqualified investors take advantage of regulatory loopholes, the expert said. “This will in no way serve Xiongan’s economy.”

The document also mentioned other goals in the financial area, include seeking the relocation of big financial-services providers, attracting them to open branches and regional headquarters in the Xiongan area, and encouraging foreign-invested banks to move or expand their operations to Xiongan.

Read more about Xiongan New Area

Contact reporter Wang Yuqian (

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