BEIJING -- 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 kilometres (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. 

The move was a "major historic and strategic choice made by the CPC Central Committee with Comrade Xi Jinping as the core" and would be "crucial for millennium to come", the official Xinhua news agency reported late Saturday.

Located between Beijing, the port city of Tianjin and Shijiazhuang, Hebei's provincial capital, the zone would eventually be expanded to 2,000 square kilometres, it said. 

It is the latest step in China's efforts to reduce traffic, air pollution, and population growth in overcrowded, smoggy Beijing. 

Other recent measures to curb runaway growth in the capital have included the shuttering or relocation of factories and wholesale markets to neighbouring regions. 

Plans are also in the works to move municipal government infrastructure out of central Beijing to suburbs in the east.  

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