FX.co ★ China to launch new special economic zone

China decided to establish new special economic zone in northern province Hebei, CNBC reported. The province has been hit by massive job layoffs. The government’s move is aimed at boosting domestic economic growth.

The Xiongan New Area, located about 100 kilometers from Beijing, will take the so-called "non-capital functions" instead of China’s capital. According to local media, this is part of a wider initiative to support the economy, and to integrate Hebei with the capital city and nearby Tianjin.

Beijing is transforming the process of economic growth, switching from the manufacturing to the services sector. Development of Hebei is one step in that direction.

The province is the country’s center of iron and steel production. Both sectors have been hit with massive layoffs and overcapacity.

It is not the first time China is establishing a special economic zone. Some of them were rather effective.

The most successful were Shenzhen and Shanghai. Established almost 37 years ago, the Shenzhen special economic zone turned the fishing village into the manufacturing and high-tech center. The Pudong area in Shanghai is now a major financial center.