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Legal Thoughts on the Construction of Xiongan New Area

2018-6-29


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On April 14th, 2018, the Central Committee of the Communist Party of China and the State Council issued the "Official Reply about the Planning Outline of Hebei Xiongan New Area" and approved "The Planning Outline of Hebei Xiongan New Area" ("Xiongan Planning Outline"), which took one to two years to be completed. Out of 279 overseas and domestic planning institutions, 12 top-tier teams were selected to conduct international consulting on the planning of the Xiongan New Area. More than 60 academicians and masters in architecture field and 300 other famous experts including Wu Liangyong, Zhang Jinqiu, Wu Hequan participated throughout the process of the drawing-up of the planning. For the purpose to actively participate in the construction of Xiongan New Area, DeHeng Law Offices established its office in Xiongan New Area and formed strategic relationship with local partners in order to provide legal support for the construction of Xiongan New Area. In respect of the legal perspective, the following issues should be paid attention to:            


           

I. Connecting the Construction of Xiongan New Area and Beijing City
               

The establishment of Xiongan New Area is closely connected with the aim of relieving Beijing from its non-capital roles. Chairman Xi pointed out in the report of the 19th CPC National Congress that the aim of relieving Beijing of its non-capital roles is an opportunity to enhance the collective development of Beijing, Tianjin and Hebei Province by planning at a high standard and building according to such high standard. Pursuant to the "Beijing City Overall Planning (2016-2035)", Beijing's strategic position is the national political center, the cultural center, the international exchange center, and the technology innovation center. By 2020, Beijing's permanent resident population should be within 23 million and remain at this level afterwards. The "Beijing City Overall Planning (2016-2035)" also mentioned to connect in full dimension and actively support the construction of Xiongan New Area, ensuring the transfer of its non-capital functions and populations to Xiongan New Area and enable Xiongan New Area to shoulder such non-capital functions.

In respect of connecting Xiongan's development with Beijing, the construction of Xiongan New Area needs to actively shoulder Beijing's non-capital functions and surplus populations. The "Beijing City Overall Planning (2016-2035)" indicates the support to orderly transfer key resources to Xiongan New Area such as administrative institutions, business headquarters, financial institutions, higher education institutions, technology research institutes, and hospitals. The "Xiongan Planning Outline" pointed out the key of shouldering Beijing's non-capital functions is to specify what those functions are. In terms of higher education institutions and technological research institutes, it is very important that they set up campus, divisional institute, and graduate schools there and Xiongan New Area needs to accommodate national technological institutes and innovative centers such as state key laboratory and various project research centers. In terms of health care institutions, it is encouraged that top tier health care institutions set up branches and research centers in Xiongan New Area and strengthen cooperation with international health care institutions. In terms of financial institutions, Xiongan New Area needs to accommodate headquarters as well as branches of banks, insurance companies, and security firms and it is encouraged that these firms should carry out innovative financial services. In terms of top tier service industries, Xiongan New Area may give priority to software and information service, design, innovation, consulting services, etc., and this list includes headquarters of modern logistics, e-commerce services and so on. In terms of high-tech industries, it is suggested to give priority to state owned enterprises, innovative private businesses, or innovative technology companies in the field of new generation information technology, biological medicine, biological health, energyconservation, environmental protection, top tier new materials, etc. Zhongguancun Science and Technology Park is encouraged to set up a divisional campus in Xiongan New Area.

What should be noted is that, according to the "Planning Outline of the Coordinated Development of Beijing-Tianjin-Hebei Region", there are four types of non-capital functions that need to be relieved and the focus should be common industries, in particular, high energy-consuming industry; tertiary industry sectors such as regional logistic base, regional specialized market, etc.; social public service functions such as education, health care, and training institutions; administrative,not-for-profit institutions and business headquarters. The aforesaid four types of non-capital functions differ from the sectors to be encouraged in the "Xiongan Planning Outline", e.g. high energy-consuming industries, regional logistic base, and regional specialized markets are not included and while modern logistics and e-commerce company headquarters are included.
                           


           

II. Connecting Xiongan‘s Development with Hebei Province
               

The "Planning Outline of the Coordinated Development of Beijing-Tianjin-Hebei Region" defines Hebei Province as "an important base for national modern commercial logistics, the experimental field for evolution of industries, the model area for new forms of urbanization and whole-planning urban and rural areas, the supporting area for environments of Beijing-Tianjin-Hebei region". In terms of the development in both Xiongan New Area and Hebei Province, the following issues should be paid attention to:

(1) Strengthening the development of environmental protection is the key to the successful development of Xiongan New Area

The "Xiongan Planning Outline" pointed out the need to strengthen the development of environmental protection and building up the environmental system in Xiongan New Area. The aim is to build an integrated biological city. The first step is to restore the biological balance of the Baiyang Lake in order to recover its "kidney" function of Chinese northern areas. The second step is to build greenery around the Baiyang Lake and throughout Xiongan New Area in order to maintain the biological structure between Xiongan New Area and its surroundings. Thirdly, nine stripes of forests are to be maintained between cities in order to enhance carbon sequestration and ensure bio-diversity. Lastly, along main courses of rivers and roads around Xiongan New Area, it is to build multiple greeneries with the ventilation purpose.

The building of biologically balanced environment is the key to the successful development of Xiongan New Area. However, Hebei Province still faces various environmental problems such as the tension between the environment and economic development. Shijiazhuang City Committee's Vice Secretary Mr. Zhang Zefeng once said "in order to build a supportive area for the biological environment of Beijing, Tianjin, and Hebei, Hebei Province needs to step up the pressure on itself", and such task is a hard one but must be overcome. [1]

(2) Enhancing the development of transportation infrastructure and promoting the development of commercial logistics

According to the requirements regarding network layout, smart management, and integrated services, the "Xiongan Planning Outline" pointed out the need to accelerate the connecting of the construction of Xiongan New Area and Beijing, Tianjin as well as other surrounding cities, build the transportation network between Beijing's new airports and build general transportation network, including:

a. Building regional high railway transportation network of "Four Verticals and Two Horizontals" [2] with particular emphasis on strengthening the connections between Xiongan New Area and Beijing, Tianjin, Shijiazhuang and other cities. It is important to realize the effective integration of the Xiongan New Area into rail network between Beijing, Tianjin, and Hebei and make it 20 minutes to arrive at Beijing New Airport, 30 minutes to Beijing and Tianjin, and 60 minutes to Shijiazhuang.

b. Developing regional highway network of "Four Verticals and Three Horizontals" [3]. It is to realize the 60 minutes transportation from Xiongan New Area to Beijing and Tianjin and 90 minutes to Shijiazhuang by highway. It is also important to connect the transportation between Xiongan New Area, Tianjin Harbor and Port of Huanghua and make access to sea for Xiongan New Area.

c. Enhancing the service level of airlines. It is to strengthen the speedy and efficient connection between Xiongan New Area and Beijing New Capital Airport, Beijing Capital International Airport, Tianjin Binhai Airport, and Shijiazhuang Zhengding Airport by high speed railway and highway network.

d. Making reasonable layout of comprehensive transportation hub and forming the "Two Principals and Two Supplements" [4]  transportation hub.

The improvement of transportation infrastructure will be helpful to the development of modern commercial logistics industry. The areas of Beijing, Tianjin and Hebei have 120 million consumers with total sales of goods and the added value of the logistics industry each accounting for 23% and 12% nationally, being one of the most active and concentrated areas nationally in respect of commercial logistics activities. The "Xiongan Planning Outline" has indicated certain industries as important industries to be developed including business services, smart logistics, modern supply chains, etc. In 2016, the Hebei People's Government issued the "Notice about Printing and Issuing the Plan about Hebei Province to Build Nationally Important Base for Modern Commercial Logistics" and pointed out that the core is to serve Beijing and Tianjin, develop Hebei Province, utilize Hebei Province's position and resource advantages, develop the spatial structure of "One Circle, Two channels and Multiple Nodes" [5]  commercial logistics, further develop commercial logistics industry, and make it into a new foundational industry as soon as possible.[6]
                           


           

III. Connecting the Development of Xiongan New Area with Tianjin City
           

The "Planning Outline of the Coordinated Development of Beijing-Tianjin-Hebei Region" defines Tianjin City as the "nationally advanced base for manufacturing and R&D, the international airline core area of Chinese northern part, the modal area for financial innovation and the pioneering area for opening-up". Tianjin provides Xiongan New Area with access to the sea by highway network and it is important to strengthen Xiongan New Area's transportation connection with Tianjin Harbor and Huanghua Port. Additionally, the development of Xiongan New Area can attract Tianjin's technology and investments. In April of 2017, Tianjin and Xiongan New Area signed the "Strategic Cooperation Agreement about Promoting the Development of Xiongan New Area between Hebei Province and Tianjin People's Government". According to the news report, Tianjin City Committee's Secretary Li Hongzhong pointed out that Tianjin Municipal Committeeand the government will actively serve and support the development of Xiongan New Area and provide any supports necessary in this regard. Tianjin will actively study the advanced concepts behind Xiongan New Area's development and use it to promote the construction process of Tianjin. It is therefore necessary for Hebei Province and Tianjin to better work together and enable them to connect with each other in full dimensions in order to realize the national strategy ofthe construction of Xiongan New Area . [7]
                           

[1] "Hebei:Forging an Area that Supports Beijing, Tianjin and Hebei Ecological Environment", 2016-01-13, Source:'Guangming Daily' (03 edition)            

[2] "Four Verticals" refers to Beijing and Guangzhou High-Speed Rail, Beijing, Hongkong and Taiwan High-Speed Rail –Xiongshangduan, Jingxiong – Shixiongchengji, New Area to Beijing New Airport Express; "Two Horizontals" refers to Jinbao Railway, Jinxiongchengji – Jingkun High-Speed Rail Xinxiongduan'            

[3] "Four Verticals" refers to Beijing, Hongkong and Macao High-Speed Rail, Daguang Highway, Jingxiong Highway (including New Airport Northern high-speed sub-line), New Airport to Dezhou Highway; "Three Horizontals" refers to Rongwu Highway New Line, Jinxiong Highway, Jinshi Highway.            

[4] "Two Principals" refers to Xiongan High-Speed Rail Station, Intercity Station, the hub of high-speed rail converges on Zangang and connecting nationally by relying national network of high-speed rail; the layout of intercity station hub is situated in the commencing area, integrating the station with cities involved, in order to realize the direct link between Beijing, Tianjin and Hebei's core municipalities. ‘Two Supplements' refers to Baiyang Lake Station, Baigou Station, relying on existing lines, servicing New Area's outer northern area, also making room for logistics activities.            

[5] "One Circle" refers to converging area for commercial logistics industries around the capital; "Two Channels" refers to eastern and western bulk commodity channel and southern and northern general logistic channel; 'Multiple Nodes' refers to each city's important logistics hubs, 100 county's special logistics markets and 100 commercial exchange centers.            

[6] Hebei People's Government issued the "Plan of Hebei Province for Developing Important Base for National Modern Commercial Logistics (2016-2020)", 2016-05-09, Source: Commerce Ministry Department for the Development of Logistics Industry.            

[7] "Li Hongzhong Serveyed Xiongan New Area: We will implement everything if Tianjin is asked for", 2017-04-19, Source: Sina General.

           

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      Harrison Jia                                            

                                                 

        Partner / Attorney                                            


                                           


                   


                           
                           

Mr. Harrison Jia practices in the fields of M&A and insurance. Mr. Jia is a Master of Law of both NYU and CUPL, and qualified to practice in the New York State and China. Mr. Jia is an admitted lawyer in the field of international investment legal affairs by MOFCOM, the Chairman Assistant of BNRSC, Deputy Secretary of New Energy International Development Federation, Representative of Chief Lawyer Counsel of China Insurance Association, Member of Legal and Compliance Committee of China Insurance Asset Management Association.                             

Email:  jiahui@dehenglaw.com                            


                   


               


           


           


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