China Picks Sleepy Village as Hub of Financial and Tech Zone
Since the time of the Ming dynasty five centuries ago, the village of Quantou has stood amid the wetlands on Bayang Lake, one of the largest in northern China. Roughly 50km south of Beijing, its main industry has been tourism, catering to urbanites seeking a lazy day catching crayfish among the reed marshes.
But on Saturday this sleepy corner of Hebei province was catapulted into confusion by news of its imminent transformation into “Xiongan New Area”, a global financial and technology center to rival Shenzhen and Shanghai.
Official news agency Xinhua surprised locals with a government announcement that surrounding Xiongan county would, in its near entirety, become “another new area with national significance after the Shenzhen Special Economic Zone and the Shanghai Pudong New Area”, two of China’s most vibrant areas that sprung up from farmland in the space of a few years in the 1980s and 1990s. Xinhua described the initiative as a “major historic and strategic choice” by China’s President Xi Jinping.
The announcement has put sleepy Xiongan on the map. Such is the demand for Xiongan residence permits, or “hukou”, that the local government announced a temporary halt to registering marriages in the county. Shares in stocks related to Hebei province have soared.
Meanwhile, the government has clamped down on speculators in the midst of a property boom, as out-of-towners flock to the county’s real estate developments with suitcases of cash to buy apartments. The state-run China Daily on Thursday reported that seven people had been arrested for breaking real estate rules, while 71 sales offices had been closed.
Quantou residents say they should have seen it coming. An announcement at the start of the year prohibiting the building of homes in Quantou and surrounding villages was a sure sign, they say, that their town would be razed like many a village in China to make way for urban progress. They are likely to receive new apartments and compensation but have not been told where or how much.
“What else can we do other than going where the government tells us to?” says an elderly Quantou resident in his 70s who asks to be identified only as Mr. Chen. “The decision has been made so our only option is to go along and follow the order when it comes.”
The fate of Xiongan offers a microcosm of China’s rapid urban development, with a few words from a political leader often being enough to send property developers, financiers and speculators racing to make a fast buck on the next boom. The government has created dozens of “new areas” in recent years as part of a huge urbanization drive that has swelled cities’ populations by hundreds of millions.
Now, as Beijing suffers overcrowding, Xiongan New Area is among a planned constellation of megacities uniting the capital with neighboring Tianjin and Hebei province, aimed at attracting overflow population and commerce from the capital.
“The move will help phase out non capital functions from Beijing, explore a new model of optimized development in densely populated areas, and restructure the urban layout in the Beijing Tianjin Hebei region,” Xinhua quoted the government announcement saying.
Most property developments in the county are ringed by police and security guards prohibiting non-residents from entering. In the parking lot of the Wenquan Xiaozhen (Hot Spring Town) compound, a loudspeaker plays a continuous loop of exhortations to avoid speculators.
That did not stop the owner of a small dumpling restaurant inside the compound, who gave her name as MS Zheng. She recently bought a 120 sq m apartment in one of the county’s top compounds “It was newly renovated and I’m willing to sell it now,” she tells customers.
A real estate buyer who only gave her name as MS Sun said she had sold 16 apartments in just a few days despite a government ban on new sales, and that housing prices had quintupled.
“There have been rumors about the new area since the end of last year and housing prices have been skyrocketing since then,” she says.
But back in Quantou, the villagers are not expecting to get rich. “We don’t have any real estate here,” says the elderly Mr. Chen’s daughter, who owns a restaurant in town. But she said she is looking forward to having a new flat somewhere else. “The government should have reasonable arrangements in place for us villagers,” she says confidently.
Source: Financial Times by Charles Clover and Sherry Fei Ju | April 7, 2017