Top State firms eye Xiongan prospects

More than 30 central State-owned enterprises from the power, infrastructure and transportation industries have made plans to seize business opportunities expected from the planned creation of the Xiongan New Area in Hebei province, according to the website of the country's top SOE regulator on Monday.

Central SOEs including China Telecommunications Corp, China Eastern Airlines, China National Machinery Industry Corp and China Energy Engineering Corp Ltd have all held top management meetings to discuss plans to develop new areas, according to the website of the State-Owned Assets Supervision and Administration Commission.

To ensure sufficient clean energy supplies, China National Offshore Oil Corp said it will build a branch liquefied natural gas pipeline to the Xiongan New Area, stretching from its LNG supply network connecting its production base in the Inner Mongolia autonomous region to consumption markets in northern China.

"The new area will certainly bring in people, capital and consumer goods, which requires the companies to build hospitals, industrial parks, roads, airports, energy and water-supply facilities," said Lu Huapu, a professor at Tsinghua University and a member of the expert committee advising on the integrated development of the Beijing-Tianjin-Hebei region.

Lu said central SOEs, particularly in infrastructure, telecommunications and transportation, are not only expected to be the first batch to move their headquarters and subsidiaries to the new area, but also the first group of project contractors to build the infrastructure of the area.

Liu Qitao, chairman of China Communications Construction Co, said: "Buildings, public transportation, parking, traffic management and logistics should all be supported by smart systems."

The new area has also brought growth opportunities to financial institutions and companies.

China Construction Bank will establish a leading group to coordinate the company's business in the new area in its headquarters in Beijing, as well as setting up a regional branch in the area.

China Merchants Group will also support the Xiongan New Area financially in all aspects, including bank loans, bonds, financing, public-private partnership and public listing business.

For central SOEs, carrying out big-ticket projects in the new area is more convenient than conducting similar businesses in overseas markets, it would be easy for them to gain financial and policy support in the domestic market and there are fewer risks," said Li Jin, chief researcher at the Beijing-based China Enterprise Research Institute.