China’s decision to turn a rural backwater in Hebei province into the next Shenzhen or Pudong has ignited a real estate frenzy with property prices skyrocketing, changing locals’ fortunes overnight in the newly-dubbed Xiongan New Area.
Just one week ago, home prices in quiet Rongcheng county were between 5,000 to 6,000 yuan per square meter. But after it was announced on Saturday that Rongcheng would be one of the three counties included in the new special economic zone about 100 kilometers southwest of Beijing, which had been handpicked by Xi Jinping himself, prices have soared up to 20,000 yuan per square meter.
The once-forgotten corner of Hebei, plagued by poverty and layoffs, has now turned into China’s hottest piece of real estate as thousands of homebuyers from around the country have flooded into the area, clogging the dusty streets with luxury cars, looking to make a big profit in China’s latest urban experiment. However, the local government has responded by slapping down severe restrictions on the real estate market in the region, temporarily banning land and property purchases until they can make some sense out of this dramatic and sudden reversal of fortune.
Already, authorities have demolished 125 illegal buildings and arrested seven people for breaking real estate restrictions. In Rongcheng county all real estate agencies and rental homes have been shut down. In neighboring Xiong county, a large screen in the center of town displays the message: “Property is for living, not for speculation.”
These restrictions have put a temporary halt in locals’ get-rich-quick schemes. Earlier this week, a meme went viral on Chinese social media featuring a 53-year-old divorced construction worker with no kids, a rural hukou and 2 mu of land in Xiongan seeking a wife — preferably one under 25 who has studied abroad in the United States or the United Kingdom.
Despite all the hysteria surrounding the Xiongan New Area, it’s not clear what the area will exactly turn out to be, and we probably won’t know for at least a decade. According to China Daily, Xiongan is designed to “spur economic growth,” “take over Beijing’s noncapital roles,” and “serve as another economic engine and advance the coordinated development of the Beijing-Tianjin-Hebei region.” It’s also being billed as a “new way of developing densely populated areas,” attempting to remedy air pollution and traffic congestion problems that continue to plague Chinese cities.
The special economic zone is even been called “a strategy crucial for a millennium to come” by China’s central committee and state council. China’s official Xinhua news agency rhapsodizes: “Xiongan will be an answer to China’s growth conundrum: breakneck urban sprawl must give way to a balanced and inclusive development strategy. The creation of the area is the right decision at the right time. Xiongan will be more than a mere replica of China’s past success; it will tell the tale of the future of a new city.”
Some see the zone as Xi’s personal pet project. In the 1980s, Deng Xiaoping turned Shenzhen from a sleepy fishing village into an industrial boomtown. In the 1990s, Jiang Zemin turned Pudong from a rural wetland to a financial hub. While Xiongan may not look much now just imagine what it could become. Baozi shops as far as the eye can see!
[Images via NetEase / Sina]
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