China's sudden announcement over the weekend that it is to construct a new Special Economic Zone (SEZ) called the Xiongan New Area south of Beijing has brought the target region into sharp focus. In just the last couple of days, the neighboring town of Baigou has seen an increase in the number of visitors. But many business owners there are worried about the construction of a new SEZ.

Baigou town is situated next to the planned Xiongan New Area. Traffic there is much busier these days than usual. For decades, the town's main industries have included the making and selling of bags, toys and other wholesale businesses. Entrepreneurs now feel that the establishment of an SEZ next door will help them share in its prosperity.

Zhang Xiaoyan who sells toys says, "I think we'll have more and more customers. As the region develops, we can sell items at a higher price. It's definitely a good opportunity." 

Zhang couldn't be happier. Her hometown, which is close to Baigou, is one of the three counties that will be incorporated in the New Area. But for Baigou resident Sheng Xi’e, there is little reason for celebration. As we talked about business, she suddenly shifted focus to housing. "House prices have continued soaring. It used to be 7,000 yuan per square kilometer, but it was nearly 20,000 yesterday." 

Locals say property investors from Beijing and other provinces have come flooding into the area over the last two days. Outside a real estate store, some prospective buyers lament that no matter how much they pay, there are no houses for sale.

For Liu Xiaoyun, a busy street outside is not a sign of more business, but more worries. "There will be more investment in the future. But if they only invest in real estate, rather than real businesses, house prices will be too high for us, and it will be more difficult for us to make money."

My intent was to ask entrepreneurs in Baigou how bordering the Xiongan New Area would influence their businesses. But almost everyone I interviewed kept talking about house prices. They worry that the profits made by their small businesses won't be able to keep up with the soaring real housing price, which is said to have risen several times in just two days.