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Xiong’an New City is China’s Dream Capital City

Xiong’an New City is a wide stretch of land just outside of Beijing, selected by China’s President Xi Jinping as part of his “thousand-year” bold plan. He aims to transform it into a dream capital city filled with brand new technologies and innovative creations.

The Xiong’an New City will seek companies focused on information technology (IT), new energy and materials, and even biotechnology. Chen Gang, the district party chief of Hebei province, says these companies will be provided various benefits and incentives so they may establish operations in the president’s dream city.

Known as the Jing-Jin-Ji plan, the creation of the Xiong’an New City is only one of President Xi’s main initiatives – the other being the Belt & Road Initiative (formerly the One Belt, One Road or OBOR initiative), a $1 trillion infrastructure project of having trains and international commerce on the maritime Silk Road.

From Anonymous to Astonishing

The announcement of Xiong’an New City has led to many investors flocking to the site, a formerly anonymous area a stone’s throw away from China’s current, yet smog-clouded capital. The new city covers an area that is nearly three times the size of New York, based on plans announced by the Communist party’s top leaders in late 2017.

The Xiong’an New City will be approximately 100 square kilometers (nearly 39 square miles) combined, straddling three counties located 100 kilometers southwest of Beijing. They described it as “a strategy crucial for a millennium to come.” The three counties, Xiong, Rongcheng, and Anxin, is set to expand and cover 2,000 square kilometers (nearly 775 square miles) – a 20-fold expansion that rivals the size of Shenzen.

Xinhua News Agency, China’s official press agency, reported that the creation of Xi’s dream city would relieve pressure on Beijing, the country’s capital, overflowing with 22 million residents and clogged with car-clogged traffic issues. According to their report, this project is the answer to China’s growth issue, and will “usher in a new chapter in the country’s historic transitioning to coordinated, inclusive and sustainable growth.”

Carefully Curated

“More than a mere replica of China’s past success … it will tell the tale of the future of a new city,” the Xinhua agency reported.

Chen said a lot of companies are interested in squeezing themselves into the project. However, he urged that they “will be selective” in approving which companies get to join in. “We will also help some local companies transform,” he said, “because there’s still a local population of 1.28 million people in the Xiong’an New City, who may not all be able to perform hi-tech jobs.”

“We welcome big data, internet technology, mobile technology, and biotech companies,” Xu affirmed. “We will coordinate local resources and companies to integrate with these advance tech companies.”

The new city’s estimated growth in physical size also points to total investments that may reach up to 2.4 trillion yuan (approximately $362 billion US) within the next 20 years, based on estimates from Morgan Stanley. The district is still a blank page, filled with little financial and industrial support, as well as weak infrastructure. This is a good thing, as this “blank sheet of paper” is a “thousand-year strategy” according to Chen.

With their plans of carefully curating this bold idea, Xiong’an New City plans on offering premium public services. This includes education, housing, and medical facilities that rival those available in Shenzhen and other major cities competing for investments and flow of talents.

President Xi’s vision of the dream city that it may end up as a demonstration of China’s innovative development, which he believes should not only focus on technological advancements but also ecological protection and the improvement of people’s wellbeing.

The People’s Republic of China has, in recent years, created dozens of “new” cities and areas as efforts in massive urbanization. This series of bold moves have allowed hundreds of millions of people flocking to cities, and Xiong’an New City is no stranger to the concept. Compared to previous investments and efforts by the country, such as the constructions for the 2008 Beijing Olympics (290 billion yuan) and the 2010 Shanghai World Expo (28.6 billion yuan), Xiong’an New City may bring in as many as 6.7 million people over the next 10 years along with a projected investment of 1.2 to 2.4 trillion yuan, which is impressive yet achievable.

Deliveroo Delivers with $385 Million in New Funding

Deliveroo funding recently just raised to $385 million, which brings the company to a valuation of $2 billion. Another $98 million has also been invested, Deliveroo however, is not disclosing the source of the fund.  Among its previous investors were Accel Partners, DST Global, General Catalyst and Index Ventures. It also had several private unnamed investors. Participating in the latest round were T. Rowe Price Associates and Fidelity Management & Research.

Growth for Deliveroo

The company said that the additional funding is for expansion: its Editions program; addition of more personnel for its technology team; and for a wider reach in new cities and countries.

The expansion of “Editions” program, formerly called the RooBox, enables an expansion to include delivery-only partner restaurants. This will allow them to increase their sales volume without any additional upfront costs. Customers would also have a larger selection of food items to choose from as well as improving delivery times.

Additional technology personnel will allow Deliveroo to work on real-time logistics and AI systems, improving speed and number of deliveries in the same time frame. This will allow for better use of resources while maintaining the small margins per delivery. The tech personnel would also be able to study the data and improve on the choice of the next kitchen locations, as well as the choice of food offerings.

In order to grow, Deliveroo has to service more towns and cities, in more countries. This will also grow the potential market, with more people able to order great-tasting food quickly from their favorite local restaurants to their doorstep. With more choices in more locations, people would have more reasons to order via food delivery instead of going out. In addition, for those who usually don’t go out anyway, they would have more reasons to order from well-known restaurants in their area, instead of having microwave dinners.

Restaurant Trends to Ride On

The company anticipates the coming trend for the UK restaurant industry, where consumers will have more power to choose, with healthier food options, and new food choices. Restaurants will also have more data to cater to their customers. For Deliveroo, this will bring more diverse choices to its customers, as well as allow for faster deliveries. This, in turn, will allow their riders to continue enjoying a well-paid job with flexible work hours.

There was doubt that Deliveroo would be able to raise its needed additional funding after a UK union brought a case in court against the company asserting that their drivers are full-time employees, and not contract workers. Being full-time employees, the drivers would have additional benefits including paid time off and other benefits.

In related news, Deliveroo announced that it will be servicing 200 cities soon, launching its service in Cannes, in the south of France.

In the meantime, Hungryhouse and JustEat also recently announced that their merger got their approval by UK regulators. The two companies first announced their merger plans in 2016. JustEat was formerly a company under Delivery Hero. For its part, Delivery Hero will exit the UK upon finalizing the deal. JustEat is paying Delivery Hero £240 million for the merger. This is in line with JustEat’s plans to increase its presence and market share in the UK.

Food delivery startups need deep pockets in order to compete in the marketplace. Among the companies already competing in this space are Uber’s Uber Eats, Amazon’s Restaurants service and Postmates, which recently expanded its service to Mexico. To compete, food delivery companies must find ways to innovate amidst small margins.