China plan to create new Shenzhen spurs frenzy

BEIJING: It didn’t take long for news that China would set up an economic zone near Beijing to touch off an investor frenzy.

Within 24 hours of Saturday’s announcement that the government would create the Xiongan area in Hebei province — in the same spirit that Shenzhen and Shanghai’s Pudong was built — hordes of prospective buyers had thronged to the region. Highways were clogged as they came to purchase real estate, with some camping outside property agent offices overnight, according to media reports. On Sunday, the government banned all property sales in the zone to stem speculation, according to the National Business Daily.

On Monday, shares of Chinese cement, building and port-related stocks surged in Hong Kong amid optimism the decision will spark a flurry of construction activity. The move by President Xi Jinping, which evokes memories of the rise of Shenzhen since it was declared a special economic zone more than three decades ago, is seen as a historic milestone to power China’s growth for a “millennium to come”, the official Xinhua News Agency reported. The new zone is expected to eventually cover about 2,000 square kilometers and jump-start China’s economic growth.

The development of the region will create an urban district in Hebei that will help move some of the noncapital functions away from Beijing, Xinhua reported on Saturday. The authorities want to turn the region into a new growth center as China’s economy slows, according to the news agency.