China’s Xiongan New Area To Learn From Ancient Egypt

The campaign against corrupt factions in the ruling elite who had accumulated vast wealth through illegal economic activities had made the national leader to seek for a consolidation of his position by ordering the construction of a new city on Virgin land South of the existing capital.

In building his new city, he not only hoped to leave a physical monument to his own grandeur for all posterity, but he also aimed to create a new cultural, commercial and administrative centre untainted by the pollution of the existing capital. And of course, the project provided him with a major opportunity to reward his supporters in the long power struggle by dispensing patronage on a grand scale.

So, in 1,346 BC, the ancient Egyptian pharaoh Akhenaten ordered the construction of Akhetaten, on the Nile some 300km south of Egypt’s existing capital, Thebes.

Ever since, every strongman leader in history worth his salt, once consolidated in power, has decreed the construction of a new city, both to stamp his mark on the age by signalling a new political era, and as his legacy to the future. Some have prospered – Alexandria, St Petersburg. Others have struggled – Brasilia, Abuja, Washington DC.

Now Chinese President Xi Jinping (習近平) has added his name to the long list that began with Akhenaten. On April 1, the Communist Party announced plans to build a “subsidiary capital”, dubbed the Xiongan New Area, some 100km south of Beijing in Hebei (河北) province. The announcement compared the importance of the project to the development of Shenzhen in the 1980s and Pudong in the 1990s, and declared Xiongan to be “crucial for the millennium to come”.

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Reactions to the announcement were entirely predictable. China’s state media dutifully regurgitated the official line, gushing about economic development, high-tech investment, business innovation, energy efficiency, environmental protection and the like. State banks and corporations lined up to pledge support for the project. And individual investors rushed in, snapping up any properties for sale in the neighbourhood, and bidding up the stocks of companies, like state cement giants, thought likely to benefit.

Meanwhile, more sceptical observers in the overseas media sniffed about white elephants and the misallocation of capital by government planners. They ridiculed the decision by state shipbuilder CSIC to relocate operations to the new city more than 150km from the coast. And they dwelt at length on the failure of other grand projects, such as the deserted “eco-city” Caofeidian, also in Hebei.

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In this case, it is likely both the enthusiasts and the sceptics will be proved wrong. Certainly all the breathless talk about how Xiongan will power a new phase of growth for China’s economy is ludicrously overstated. Beneath the hyperbole, the government’s plans for Xiongan are actually quite modest: a handful of institutions and government agencies relocated from Beijing, in a city with a population of no more than 2.5 million. That’s hardly a small town, but neither is it a growth-driving megalopolis like Beijing, whose population is now reckoned to be somewhere north of 20 million.

Of course, if the plans for Xiongan are less ambitious than generally perceived, then the probability that the project will prove an embarrassing white elephant is smaller too.

In reality there is little exceptional, or even new, about Xiongan beyond Xi’s personal stamp of approval. It has long been the central government’s policy to promote the development of smaller cities, rather than encouraging the further expansion of giant urban areas like Beijing or Shanghai.

There are plenty of observers who argue this policy makes little sense. They contend that megacities offer economies of scale that make them more economically efficient. Building new towns from scratch on greenfield sites involves unnecessary duplication, they say, wasting resources that could be better deployed elsewhere.

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It’s a debatable point. In any case, China’s rulers have political reasons for preferring smaller cities. Large cities like Shanghai or Chongqing (重慶) carry too much political heft. They are big enough for local party bosses to establish personal economic and political fiefdoms so extensive they could act as the springboard for a power grab at the national level. Far better to have a large number of smaller cities in competition with each other than a few more politically dominant giants.

Seen in that context, Xiongan is nothing more than a new satellite town, comparable to those that ring big cities elsewhere in the world, including New York and London. Such satellites always attract criticism, especially if built from scratch. But ultimately they succeed because they offer lower costs, encouraging both companies and households to move out from the central city.

Of course, it is possible that Xi secretly plans an altogether more grandiose future for Xiongan. If so, he would do well to read up on Akhenaten and his new city on the Nile. His development, intended as the centre of a new national religion, was inhabited for little more than decade after its construction. Within a few years of the pharaoh’s death, his name had been erased from the official histories, and the ruins of his city had returned to the sands of the desert to lie undisturbed and forgotten for the next 3,000 years.

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