Xiongan is not Shenzhen or Pudong: why latest new area may falter despite push from Beijing

Winston Mok says a rare confluence of factors created the two economic marvels next to Hong Kong and Shanghai, while Xiongan may face an uphill task in unleashing similar market forces to boost its fortunes, despite ambitious state plans

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President Xi Jinping inspects the Xiongan New Area scheme in Anxin county of Baoding city, Hebei province, on February 23. The plan for the new area, about 100km southwest of downtown Beijing, was announced on April 1. Photo: Xinhua

Published: 1:30pm, 19 Apr 2017Updated: 6:31pm, 19 Apr 2017

Can Beijing replicate the remarkable successes of Shenzhen and Pudong in Hebei’s (河北) Xiongan (雄安), the 19th national new area designated by Beijing? After the first two, Shanghai’s Pudong and Tianjin’s ( 天津 ) Binhai, so dubbed in 1992 and 2006, respectively, the creation of more such areas has gathered pace since 2011, with 10 of them so christened in the two-year period between 2014 and 2015. After Xiongan, more will follow.

While some have been successful, others have become little more than ghost cities. Among the many experiments that Beijing started over the years, it could not determine beforehand which would end up the biggest winners.

The successes of Shenzhen and Pudong might not simply be attributable to the state. There are important market forces at work. And some unique confluence of factors cannot be repeated.

A graphic explains the plan for the Xiongan New Area in Hebei province, as part of measures to advance the coordinated development of the Beijing-Tianjin-Hebei region. Photo: Xinhua

Of the four special economic zones so designated in the early 1980s, Shenzhen ended up as the most spectacular success. With its unbeatable location next to Hong Kong, Shenzhen enjoyed the inflow of capital from all over the world – when China was once a cheap manufacturing location. It had China’s most open environment and level playing field and, to its credit, has maintained that edge. Such a combination of being in the right place, at the right time, doing the right things, is rare.

Xi Jinping’s dream city Xiongan may turn out to be China’s biggest public works project, ever

After Guangdong, Zhejiang (浙江) and Jiangsu (江蘇) were among the fastest growing provinces since economic reforms began – fuelled by township and village enterprises, private enterprises and foreign companies. Shanghai, burdened by state-owned enterprises, was a laggard but benefited from the rapid growth of its hinterland, which needed a commercial centre. For foreign firms rushing into China, Shanghai was the natural choice.