Xiong’an New District Initial Investment Will Reach 500 Billion Yuan  PPP Becomes An Important “Tool” for attracting investment

The CPC Central Committee and the State Council issued a notice on the establishment of Xiong'an New District in Hebei , which is a major decision-making arrangement, the millennium plan, and the national event. Followed by Shenzhen Special Economic Zone and Shanghai Pudong New Area, Xiong'an New District is a new area with national significance.

He Lifeng , National Development and Reform Commission Director , said that the reform of institutional mechanisms will be regarded as an institution guarantee of the development of new areas. We will explore the new model of management for the new district, deepen the reform of the administrative system, explore the reform of investment and financing system in the new district, and establish a long-term and stable capital investment mechanism to attract social capital to participate in the construction of new areas.

Tang Chuan, director of 360 financial PPP Research Center, in the "Securities Daily" interview, said the construction of Xiong'an District not only relies on the good job in urban infrastructure and public service construction, but also depends on better services and supporting facilities to attract investment and the talent. That is to say, the true purpose of the establishment of Xiong'an District is to develop the economy by making full use of policies and the infrastructure of the city.

"Learning the experience of Shenzhen, Pudong, Shanghai development, Xiong An new area should target well in its industrial positioning, leverage the attractive industries on the basis of absorbing the corporate headquarters, and develop its own creativity and advantages to ensure the self-sufficiency of funds, so as to make stable and healthy development for Xiong An new area with high increase of economy.“ Said Tang Chuan.

It is reported that Xiong An New District is composed of three small counties of Xiongxian, Rongcheng, and Anxin and other surrounding parts of the region. The current fiscal revenue is weak. And the local financial support is limited for regional infrastructure construction and public service development.

Although the central government will give financial support through transferred payment for the new district with state-level, but the expected overall collaboration efficiency may not catch up with short-term GDP growth of more than 15% of the market general expected target. Said Tang Chuan. Therefore, the PPP model with the property of “leverage” can be said an important tool to achieve the rapid development. PPP can help Xiong'an New District to build infrastructure and public service projects with limited financial resources so that the competitiveness of the area can be improved with the shortest time, and attract more investment and the talent. The positioning of Xiong'an New District will guide the construction of regional infrastructure and public services from the low township level to the high national level. In this process, the three areas: municipal, transportation and water conservancy will be the leaders to develop.

"Due to the poor city construction of the current Xiong'an New District, the region's key point of pre-development must be infrastructure projects. And related fixed asset investment will also be the main force to drive the GDP of the Xiong'an New District in the early stage. According to the Central instructions, the New District will reach the medium-term development goal from 100 square kilometers to 200 square kilometers in the 'thirteen Five' period and make a plan for the conservative expectation with reference to the characteristics of small towns in Zhejiang and the national level of the general investment. Infrastructure and public service investment of Xiong'an District is expected to reach 500 billion yuan, and PPP will be one of the important project landing modes. According to preliminary forecast, the total number of new PPP projects of Xiong'an District will exceed 100 billion yuan in the next five years.” Tang Chuan told reporters.