The Xiongan New Area, Chinese President Xi Jinping’s ambitious plan to remake a backwater into a dream city, could lure as much as CNY2.4 trillion of investments over the next decade, adding as much as 0.4 percentage point to China’s economic growth every year, according to a projection by Morgan Stanley. The new city, designed to ease Beijing’s notorious overcrowding, air pollution and congested traffic, will redirect up to 6.7 million people to the 100 square kilometer area, eventually expanding its size 20-fold over a decade. That could potentially make it the largest ever infrastructure project in the history of modern China. State-backed institutions and companies are likely to be the biggest winners out of the mega project, as they are in the best position to get the lion’s share of construction work and services, analysts said. “Xiongan will be developed under the government’s plan by tapping the country’s own resources and strength,” said Zhang Zhiqian, Deputy Dean of the China Jianyin Investment’s Research Institute, in an interview with the South China Morning Post. “In terms of investment opportunities, it’s important to follow the government’s blueprint so as to comply with the policy directions.” The People’s Bank of China (PBOC) has already put its weight behind the project, as it organized a weekend seminar to direct the country’s financial institutions to extend credits to projects associated with the project. “There will be very few opportunities for speculators who hope to get rich overnight via investment in Xiongan,” said Jianyin’s Zhang. “After all, the central government has a tight rein over it, and the development will be step by step.”

Vice Premier Zhang Gaoli said that large scale property development would be prohibited in the area. Which industries allowed to be set up would also be strictly controlled. Authorities of the newly established Xiongan New Area will move current businesses out of the economic zone to make way for incoming state-owned enterprises (SOEs) and other non-traditional industries. Obsolete and pollution-prone traditional industries will be “transformed,” the Hebei Daily reported. Ding Yifan, Deputy Director of the Institute of World Development at the State Council’s Development Research Center, said that the Xiongan New Area has to move out traditional industries because it aims to develop a “headquarters economy” and attract research centers.