Housing craze musn’t obstruct SEZ growth

By Wang Wenwen Source:Global Times Published: 2017/4/10 21:38:39

Illustration: Liu Rui/GT

I was never proud of my hometown, Renqiu, a small city to the south of Beijing in Hebei Province. Despite its geographic proximity to Beijing, it never became as famous as small Hebei towns like Yanjiao and Xianghe.

In recent years, the two towns have been the topic of conversation among Beijing residents for their skyrocketing housing prices, triggered by the central government's plan to move the seat of Beijing's municipal government by the end of 2017 to Tongzhou, a suburb east of Beijing, close to Yanjiao and Xianghe.

As the housing prices in Renqiu were not even one tenth of the prices in Beijing, I wondered why my hometown and the other two towns, all belonging to Hebei Province, didn't share the same fates.

But, "life is like a box of chocolates. You never know what you're gonna get." Overnight, the housing prices in Renqiu surged, thanks to the government's announcement in early April that it is going to build a new economic zone, which will have enormous national significance and impact similar to the Shenzhen Special Economic Zone (SEZ) and the Shanghai Pudong New Area.

The new zone, called the Xiongan New Area, covers the counties of Xiongxian, Rongcheng and Anxin, all of which are on the outskirts of Beijing in Hebei Province. And Renqiu benefits from its location right on the Xiongxian border.

My childhood friends, who now live and work in Renqiu, all talked about the outsiders' enthusiasm to buy property there, and one even said that the price of her house doubled in just one night.

It is not hard to imagine people's buying frenzy in the Xiongan area right after the announcement of the government's move. But the frenzy soon cooled down as local governments around this area all issued restrictions on both home purchases and speculative property investment.

The housing market craze is a national phenomenon. Analysts say it is driven by too much money and too few investment opportunities as China's growth slows. For individuals, investing in properties is a way to make easy money.

Regrettably, most people's immediate reaction to the Xiongan New Area is thinking about how to benefit from a possible surging housing market, rather than how to develop this latest city of the future.

Indeed, we have not heard of any successful SEZs in recent years except Shenzhen, which first became a SEZ in 1980 as part of the then Chinese leader Deng Xiaoping's drive to open up China, and Shanghai's Pudong New Area, which was established in 1993 and supplemented the Shenzhen model.

People are hoping that the future Xiongan New Area can be as modern, energetic and dynamic as Pudong and Shenzhen. However, the bubble of real estate prices made us worry whether this goal can be achieved smoothly

Meanwhile, Beijing is also burdened with multiple "urban ills" such as traffic congestion, air pollution and population explosion. The Xiongan New Area is designated to curb these ills and move certain non-capital functions away from Beijing to transform the region into a new growth pole.

It is an ambitious government plan. Though it is a long-term plan, it will impact the life of Beijing residents sooner or later. Within eight days after the Xiongan New Area announcement, 31 State-owned enterprises have vowed to support this plan and move their assets there.

The IT sector, which is concentrated in Beijing's Zhongguancun area, will also find a new platform to prosper in Xiongan. With the rapid growth of China's Internet industry and the national support for entrepreneurship, many innovative individuals could take this opportunity to start up their own businesses. This is a more laudable way for young people to make money and realize their social values than resting on speculative real estate.

As for my hometown, which will definitely take a free ride on the development momentum, it will not remain a quiet corner of the country, but hopefully, it will become a hub for talents, not speculators.

The author is a reporter with the Global Times. wangwenwen@globaltimes.com.cn

Posted in: VIEWPOINT

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