Government will open purse strings for Xiongan New Area

Injections of government money will improve infrastructure in the Xiongan New Area to attract talented people and create an ideal destination for high-end innovative industries, the nation's top economic regulator said on Thursday.

"Financial support will be given to carry out construction in areas such as traffic, ecology, water conservancy, energy and public services projects," said Yan Pengcheng, spokesman for the National Development and Reform Commission.

Yan said basic public facilities need to be good enough to attract talent, though he did not give the amount for such construction.

Yan said the government would introduce preferential policies to support development. He did not say which specific sectors would benefit.

The commission is drafting a development plan, guidelines for the first phase of construction, and plans for protecting the environment at Baiyangdian, the largest freshwater expanse of water in northern China, Yan said.

The region will be developed according to plans and the government will prevent rapid sprawl in the region.

Zhou Muzhi, a professor of economics at Tokyo University, said that although the new area seems attractive for starting a business, companies should not blindly rush in.

"Rolling out concrete plans as soon as possible would help enterprises make wise decisions," he said.

Enterprises that locate in the new area need to be able to help solve urban ills such as those in Beijing－like air pollution and congestion－drive regional growth and extend its benefits to nearby provinces, according to Li Tie, head of the China Center for Urban Development at the NDRC.

Zhou said he hopes plans make clear which specific industries are regarded as high-end and innovative as well as help with phasing out noncapital functions in Beijing.

Turning the region into a high-end industry hub means heavily polluting industries like plastic packaging may have to be cleared out first, said Shen Chi, director of the planning institute at the China Center for Urban Development.

Xiongxian county, one among three counties in the new area, is one of the three largest centers for plastic packaging in China.

Data from the China Plastics Processing Industry Association show that in 2016, the annual output of the county's packaging and printing industry reached 5.2 billion yuan ($755 million).

Plastic packaging in Xiongxian contributed 51.65 percent of local GDP as of September 2014, the local statistics bureau said.

The Xiongan New Area's preparatory committee issued information for local residents on Thursday that encouraged small enterprises in traditional sectors to either restructure or relocate to other places.