China will create a new special economic zone outside Beijing similar to those established in Shenzhen and Shanghai, the government said, in a bid to boost flagging growth and reduce the strain on the capital.

The Xiongan New Area, located some 100 kilometers (62 miles) southwest of downtown Beijing in Hebei province, will rival south China's Shenzhen Special Economic Zone, established in the 1980s, and Shanghai's Pudong New Area, set up in the 1990s.

Located between Beijing, the port city of Tianjin and Shijiazhuang, Hebei's provincial capital, the zone would eventually be expanded to 2,000 square kilometers. It is the latest step in China's efforts to reduce traffic, air pollution, and population growth in overcrowded, smoggy Beijing.

Authorities hope that the Xiongan New Area will be a new center for growth in the world's second-largest economy, which last year expanded at its slowest rate in a quarter of a century.