China’s government has unveiled a plan to shift parts of its vast bureaucracy to a provincial city 150km from Beijing, causing shares in companies linked to the struggling metropolis to surge in anticipation.
Within an hour of the announcement of the plan to move state bureaux and government institutes to Baoding more than a dozen Shanghai and Shenzhen-listed stocks surged and hit the daily trading limit of 10 per cent thanks purely to their connection to the city.
Baoding is better known in China as the home of the donkey burger. But its economy has suffered from its links to the troubled solar sector and a year-long anti-corruption campaign that has reduced the economic benefits of hosting the People’s Liberation Army’s 38th Mechanised Group, which is responsible for defending the Chinese capital.