China launches new economic zone in Hebei to promote integration

SHANGHAI (Reuters) - China will establish a new special economic zone in the heavily polluted province of Hebei in order to promote integration with the neighbouring cities of Beijing and Tianjin, the government announced on Saturday.

The Xiongan New Area will be of the same national significance as the Shenzhen Special Economic Zone, which helped kickstart China's economic reforms in 1980, the official Xinhua news agency said, citing a circular released by the Chinese cabinet.

The zone is located around 100 km (60 miles) southwest of Beijing, close to the Hebei provincial capital of Shijiazhuang, and will house some of Beijing's relocated "non-capital functions". It is currently 100 square kilometres in area but will eventually be expanded to 2,000 square kilometres.

China is currently implementing a plan aimed at integrating the economies of Hebei, Beijing and Tianjin, a heavily polluted region known as Jing-Jin-Ji.

The development of separate "fortress economies" in the region was blamed for widening income disparities and causing a "race to the bottom" when it came to environmental law enforcement.

Beijing, home to 22 million people, is trying to curb population growth and relocate industries and other "non-capital functions" to Hebei in the coming years as part of its efforts to curb pollution and congestion.

(Reporting by David Stanway Editing by Jeremy Gaunt)