China's Xiongan New Area Sees $116 Billion Investment Amid Reports of Low Occupancy

Xiongan New Area, China's ambitious "city of the future" located approximately 100 kilometers south of Beijing, has reportedly consumed at least $116 billion in investment since its inception in 2017. Despite significant capital injection, the megacity, envisioned as a smart, green utopia, is characterized by "empty office parks and bureaucratic dreams," according to recent observations. The project aims to alleviate pressure on Beijing by relocating non-essential functions and fostering a new economic hub.

The substantial investment, highlighted by The Economist, follows President Xi Jinping's "personal initiative" to create a "thousand-year plan" for urban development. However, the city's landscape currently features "eerily quiet parks" and numerous unoccupied buildings, raising questions about its occupancy rates. Official figures indicate a population of around 1.36 million in 2024, yet reports suggest newly built areas remain largely vacant.

Access to Xiongan's housing and benefits appears to be highly controlled, with "housing lotteries only elite state workers can enter, with permission from their boss." This selective approach means that only "high-skilled, politically blessed" individuals who are "okay with the Party micromanaging [their] commute, [their] pension, and [their] property rights" can fully integrate into the new urban model. Property ownership is also subject to strict regulations, including lottery systems and hukou requirements.

The development has come at a considerable cost to original inhabitants, with "locals who actually lived there before" reporting that "factories closed, priced out of homes, and told it's all for the 'greater good'." In a controversial incident during the 2023 floods, authorities reportedly diverted floodwaters to protect Xiongan, leading to the inundation of nearby towns and villages and displacing residents.

Despite these challenges, efforts are underway to populate Xiongan with state-owned enterprises (SOEs) and academic institutions. Several SOEs, including China Satellite Network Group and China Huaneng Group, have announced relocations from Beijing, with university branches also planning to open by 2025. The city has also implemented new urban management systems and regulations, such as requiring homes to be built before they are sold, in a bid to stabilize its development.