China announced plans on April 1, 2017 to create Xiong'an New Area, a new economic zone about 110 km southwest of Beijing. The new area of national significance covers the three counties of Xiongxian, Rongcheng and Anxin in Hebei Province, and is home to Baiyangdian, a major wetland in northern China. It will cover around 100 km² initially (called “Starting Zone”) and will be expanded to 200 km² in the mid-term and about 2000 km² in the long term. In this context, it is important to assess the land use pattern for the new area's planning and development. Based on remote sensing interpretation of Landsat OLI images, we examine the current land use features, the potential for built-up land saving and intensive use, and the spatial variation of arable land quality. The results indicate that the arable lands, built-up lands and wetlands account for around 60%, 20% and 10%, respectively. The potential for rural built-up land saving and intensive use is quite large. The arable land quality and use intensity in Rongcheng and Anxin counties are much better than that of Xiongxian. The pros and cons for three potential options for the Starting Zone are listed and compared. The eastern area of Rongcheng county, to the north of Baiyangdian, is believed to be the most suitable Starting Zone. Policy recommendations for built-up land expansion, farmland saving and flood risk mitigation for Xiong'an New Area are also proposed in this paper.