BEIJING China's newly approved economic zone in heavily polluted Hebei province will focus on building clusters of high-tech and innovative businesses and take over some "non-capital functions" from Beijing, a government adviser was quoted as saying.
Beijing on Saturday announced plans to build Xiongan New Area, modeled on the Shenzhen special economic zone next to Hong Kong that helped kickstart China's economic reforms in 1980.
Xiongan, about 100 km (60 miles) southwest of Beijing, will draw large state-owned companies but the process will be phased in, Wu Hequan, deputy team leader for the Beijing-Tianjin-Hebei integration project, told financial publication Caixin on Monday.
"The fundamental task of this new zone is to take over non-capital functions, but it will primarily become clusters for high-tech industries," Wu said.
The central government had set a timetable for building the zone, but had yet to make that public, He was quoted as saying.
Composed of three counties, it is currently 100 sq km (about 40 sq miles) but will eventually be expanded to 2,000 sq km (about 800 sq miles).
The announcement sparked a sudden housing boom as bargain-hunters flocked to the area, forcing Beijing to order a ban on property sales amid a broader crackdown on speculators.
In a strategy note, NSBO Research said it would be difficult for policymakers to replicate the boom of Shenzhen in Xiongan in the current environment of a slowing economy, but rather it would create another political center.
"It is essentially a greenfield site, with very little in the way of existing manufacturing expertise and no nearby financial centers to call upon,", said Rafael Halpin, head of research at NSBO.
"Ultimately, however, if Xiongan is to live up to its hype, it will not be as a new Shenzhen or Pudong, but as a new Beijing."
Pudong is another special economic zone that became the financial hub in Shanghai.
(Reporting by Chen Aizhu and Cheng Fang; Editing by Nick Macfie)