Special economic zone in the heavily polluted province of Hebei.

China will establish a new special economic zone in the heavily polluted province of Hebei in order to promote integration with the neighboring 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 (SSEZ), which helped kick-start 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 southwest of Beijing, close to the Hebei provincial capital of Shijiazhuang, and will house some of Beijing’s relocated “non-capital functions.”

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.

Modest growth

China’s manufacturing activity expanded slightly in March, independent figures showed Saturday, suggesting steady but slowing growth in the world’s second-largest economy.

The figures compare with an official reading Friday hinting that years-long growth slowdown in China may be easing, though concerns remain about the outlook for world trade in light of US President Donald Trump’s protectionist policies.

Investors closely watch the private Caixin Purchasing Manager’s Index (PMI) — an indicator of conditions at small manufacturers — as a sign of the country’s economic health each month.

The figure came in at 51.2 for March, down from 51.7 in February but still among the highest seen over the past four years.

The Chinese financial magazine said the one-year outlook for growth remained strong and jobs were cut at a marginal pace. However, it added that more manufacturers showed cautionary attitudes toward inventories and new export sales increased at their weakest pace in three months.

“Overall, the Chinese manufacturing economy continued to improve, but signs of a weakening have started to emerge ahead of the second quarter,” Caixin analyst Zhong Zhengsheng said in a joint statement with data compiler IHS Markit.

“Downward pressure may further increase.”

On Friday, official figures focusing on larger factories and mines came in at 51.8, slightly beating the 51.7 forecast in a Bloomberg News survey and up from the previous month’s 51.6.

Beijing has said it wants to reorient the economy away from debt-fueled investment toward a consumer-driven model, but the transition has proved bumpy, leading to the slower growth readings in recent years.

A vital engine of global growth, China’s economy expanded 6.7 percent for all of the last year, the slowest rate in a quarter of a century.

Premier Li Keqiang warned last month the economy faced severe challenges, signaling a further deceleration as he announced a trimmed 2017 GDP growth target of “around 6.5 percent.”