China Investment Network, a business newspaper in Beijing, released a "ghost town index" to determine which cities were, well, the most ghostly. The newspaper devised its index using a government standard that says cities should have 10,000 people per square kilometer. The editors at China Investment Network determined that if a city's ratio of people to area was 0.5 – that is, it was half full – then it is a ghost town. To take the example a step further, if a city had a ratio of .10, then it had one-tenth the population the government thought it deserved. Based on this approach, at least 50 Chinese cities fit the description of "ghost town." (1)
This report is from 2014, so maybe some of those cities were eventually filled ... but surely not all of them.
1. https://www.caixinglobal.com/2014-10-17/graphics-ghost-towns...
Given the structure of western governments, and by that I mean nominally liberal democracies, a policy of funding the development of a city prior to their being any economic reason for the city to exist, is not possible. Western forms of government wait for economic pockets to develop, then tax them, and then with the tax revenue improve them to increase their economic potential. Without a tax base there is no mechanism for funding development.
China on the other hand, has a central government with a fiscal policy of borrowing from the central bank to fund the creation of economic zones prior to there being any economic activity. Once that zone exists, it does not enhance the existing zones nearby thus as they grow there is incentive to move their activity to "nearby" zones which are under utilized. This takes time of course and between the time of construction and mass migration, well the zone is under utilized or a "ghost" town.
When China guesses wrong, and the zone never supports additional economic activity, then its a complete write-off. Something a western government could not survive (they would be booted out of office for it) but one that a central government can (and does) survive.
The bottom line is that it is easy to write stories that amaze people who live in one system by playing on the differences of the other system.
I wonder if they do this in China to things in the USA?
I imagine that if they did, it would be just as skewed and critical as the stories from the west about China are. Even so, it would be interesting to find out what is considered to be "amazing" (for whatever connotations that word has) by the Chinese (or at least their "media") about the United States...
I imagine that there might be one difference - the fact that there are probably more Chinese tourists who visit a wider part of the USA than there are USA tourists visiting the non-touristy areas of China. This might give them a different impression (perhaps closer to reality - whether that reality is objectively/subjectively good or bad to them) than the USA does of China (where we see - or are fed - information about them that still has a smell of "the mysterious" or "the exotic" or "the strangeness").
My gut feels that they likely have a far better, and likely more realistic, impression of the United States than we ourselves do - if only because they can be realistic about it without any threat, where we tell/sell ourselves stories to gloss over the difficult to talk/think about parts.
What pains me most about this, as a citizen of the United States, who has never visited China (but would like to some day) - is that I can see these things; maybe not as clearly as someone not immersed in the culture - but they are still very, very apparent to anyone honest with themselves. Yet, it feels like a large majority of my fellow countrymen either don't, or they do and just ignore it (or take advantage of it); either seems a tragedy to me.
Fox viewers probably not so much.
Don't look too closely at NYC, Vancouver, london, or any of the other hot markets. Whether for historical preservation scams or investment trickery, it is not unusual for a building to sit empty for many years. Given the effort that it takes to oust tenants, and the length of time necessary for zoning/planning, many owners would rather a building sit empty for years pending redevelopment rather than the hassle of filling it.
Google "Calgary new horizons mall". From the owner/developer's perspective that mall is technically full and, at least for them, profitable.
That mall in Calgary isn't vacant either. Each store/stall is technically occupied by its owner. There just aren't any flesh and blood people in the mall.
That mall does have people shopping in it. In terms of retail square footage it’s underutilized but a long way from empty. Good or bad investment they are not building 3 of them next to each other while the first is far from full.
Really, you have some edge cases with people trying to time the market, deal with zoning or lawsuits etc. But, that’s different from seeing 6 empty apartment buildings and saying let’s build another one.
I don't think such mass speculative building would even have been economically possible; if I remember rightly, the housing construction was done by the usual home-building companies who needed to be able to sell off their houses to residents in order to afford the next tranche.
source: https://en.wikipedia.org/wiki/List_of_United_States_cities_b...
The density of construction matters a lot here too. Many US cities like the ones you mention were not planned out and are subject to sprawl.
https://www.cnn.com/style/article/china-ordos-ghost-town/ind... https://en.wikipedia.org/wiki/Ordos_City
Apparently it is no longer a ghost town.
Kangbashi is a new remote district (New Town) of Ordos that was built over the last couple of decades and is still very much empty. It is too far away to commute to Ordos’s older more popular districts, and so people don’t want to live there. Many of the apartments have been bought out by speculators, however.
There's a lot of reporting about it subsequently.
It looks like folks are indeed moving in, but maybe not at the rate that would make sense.
Or maybe we need an article about ghost countries.
Yeah, but to get those levels, they fill blocks with dozens of identical 25 story apartment buildings. E.g.: https://pulitzercenter.org/sites/default/files/styles/node_i...
You could find an example of a row of identical buildings in any country, it doesn't prove anything.
This is the key point because the goal of these (over)-ambitious projects never was 100% allocation efficiency. It's much more comparable to the era of America's railroad tycoons than it is to economic development as we're accustomed to.
There's a relatively huge degree of waste, corruption and whatnot, but the goal isn't efficiency, it's effectiveness. Through these projects, even if a portion is ill-conceived, China is able to rapidly urbanise, avoid many of the pitfalls in regions with more incremental approaches, and also builds construction and planning knowledge (this one is very important) and finds a pathway for its export surplus.
It's the same approach China has taken to its tech industry. Is a lot of funding going to bogus projects? Yes, but they can afford it, and even if only a fraction pay off they'll consider it a win. Is it slightly mad to treat building a city like a VC investment? Sure, but then building company towns and new settlements and railroads seemingly randomly through a country was as well. And yet, when it works and it creates one new hub of innovation, it pays a hundred times over.
Speculating on property is a horrible way to go about development. Building a new district in a second or third tier that is then speculatively bought out by rich city investors with the idea that there are lot of millionaire farmers who will relocate there later is just plain idiotic.
The rapid pace of Chinese urbanisation and economic advance from such a low base has meant China's development has been necessarily highly speculative. There have been huge wins on projects that in the west would look absurd, as well as huge losses.
What you also have to remember is that the state has a huge interest to keep construction happening as its one of the biggest employing industries.
However development is trending now overall towards a more mature western approach. Big developers are more experienced. Unmet demand it not as massive as before. And wages are rising. The ridiculous projects are reducing in pace and being more carefully organised.
A lot of the speculation will have to fall off. A good old fashioned property bust would do wonders to correct all the distortions in the market, but the central government keeps doubling down on more.
That's a nation with a very big unused hammer adventuring around the world looking for a nail.
China will eventually move to a high skilled labor force and these problems will go away. But that is not today.
And I think you can question later such places later and their debt ... and not "has it out for China".
An article someone doesn't like doesn't mean they "has it out for China".
I've seen news reports on NHK showing Chinese ghost cities. One was a very long (maybe an hour) documentary that also included the ghost villages happening because people are being forced to move to the cities.
Here's a recent example: https://youtu.be/XopSDJq6w8E
What? What's the definition for "socially unacceptable" here? I have always seen news articles discussing the poor build quality in China, here are some examples [0][1].
Here's a discussion on Zhihu (Quora copycat) on house build quality too [2].
[0]: https://cj.sina.com.cn/article/detail/2381596945/79395?cid=6...
[1]: https://house.ifeng.com/column/news/jianzhushouming/index.sh...
/s
Which may or may not be true, but what you really want to know is what is the total value of property there vs. the total value of loans issued against it.
If they were only able to fill it by exploiting favorable central bank policies, all they've done is kick the can down the road.
I think it's kind of funny to call pudong an "urban district". It is one, but it feels much more suburban than puxi. It has the skyscrapers, but it's characterized by wider roads, sparser buildings, and much more view of the sky. I think of "urban" as connoting denser buildings.
I'm sorry, but this isn't true, and I say this from my own experience repeatedly visiting Dalian over the past seven years. My last trip was 2016.
Dalian's government is heavily promoting the East Harbor district. They've built a lot of skycrapers, a newly built "financial convention center"[0], a Vegas-style musical water fountain, and oddly enough, a small area modeled after old Venetian neighborhood[1] complete with canals and gondolas.
I've visited the East Harbor twice in three years. It's empty. The street lights barely work. The skycrapers are dark or unfinished. The Venetian neighborhood is is blocks of completely empty buildings. Most of these storefronts were clearly never rented, as evidenced by their completely unfinished interiors. Of the ones that were rented, there's closed coffee shop (signs are still in the window), and a closed restaurant. What does exist in this maybe square kilometer or 2 is (and I believe this list is complete), a "western style" international kindergarten / preschool, and a wedding photography studio, and a stand to rent a gondola ride. That's it. You will find as many couples getting their wedding photos taken in this neighborhood as you will tourists. (It's very photogenic neighborhood, especially at night.)
Other parts of the city also have empty apartment buildings, but I want to focus on the East Harbor, because it's a good microcosm of the ghost town phenomena.
At the end of the article, the chief executive the Tianjin Juilliard School is quoted as saying something rather insightful. “I think they are looking at this as a feather in the cap of this new project.” I think he's right. There's a very strong political component to the promotion and construction of these districts. It's a lot like shipping dubious feature all in the quest for showing "impact" at a FAANG.
Dalian's East Harbor is recently reclaimed land, and is being actively promoted (Including by the army showing up and evicting businesses in the middle of the day.[2]), as an alternative to already built and successful Xinghai Square[3] district. Xinghai Square had a fountain, but then it was ordered destroyed, to promote East Harbor. The huabiao in the center of the square, was demolished in the middle of the night. Streetlights are being turned off at night. The neighborhood is being actively sabotaged in an effort to migrate the population to the empty East Harbor district. Why would this happen? Well, the Xinghai was developed by former mayor and Xi Jingping rival, Bo Xilai. (Bo Xilai is now in jail on corruption charges.) The conventional wisdom is that East Harbor's promotion and the destruction of Xinghai is serving two purposes. It shows political fielty by carrying out a damnatio memoriae on a political rival of the new president for life, while also demonstrating the new mayor's economic "impact".
This is what's going on across the country. It's as obvious. It's as obvious as 10 city blocks of empty 50 story buildings.
[0] http://en.yifang.cn/2017/group_new_0224/72.html
[1] http://www.yunnanadventure.com/show/Dalian-builds-%22Orienta...
[2] Yeah, that happened at a rather nice indoor swimming pool / fitness center my in-laws frequented, while they were there.
Binhai is far from being exceptional from other abandoned "new areas." Even in 20m people Shenzhen, a lot of new skyscrapers are empty.
A girl I tried to date last year was running a chemical company in Ningbo's "new area." I went there too. It blew my mind that her company was occupying a whole floor in a 30 storey building, and was one of only two tenants. And that was only after the local government gave them a $3m endorsement.
The girl latter tearfully admitted to misspelling her age in Tinder by a whopping 3 years, and I moved on :)
What the article underlines well, and say what other don't is that there is a positive feedback loop:
1. Banks are given political directives to dish out loans to all those "new areas"
2. Developers than rent extremely overpriced land from municipalities, and build similarly overpriced highrises/elite hotels/luxury malls
3. A great lot of that real estate is then unloaded, and leased away to no-name municipality's own asset management companies at laughably low rate.
4. Whatever money that was not banged away immediately, ends up in same banks after a few years.
5. On the paper, the value of those skyscrapers goes up!
6. Read Marx and profit...
In essence, the state cashed out a substantial portion of the People Bank of China without anybody noticing as sum on their balance sheet was seemingly not influenced.
The problem of China 20 years ago - a lot of underused rural land
The problem of China now - a lot of underused prime rib real estate
What a weird thing to include...
The specific story or framing is seldom the most important think to discuss, compared to the story behind the story, the motives, who profits, the politics behind it being written, and so on.
Else we let ourselves being led by the nose by those framing a narrative.
They're 100% true and many of them are still ghost towns, unless you listen to the Chinese government (which is desperately trying to convince you otherwise).
Many of China’s urban districts were centrally planned and sat empty before they were eventually filled, including the famous Pudong district of Shanghai. https://www.google.com/amp/s/www.forbes.com/sites/wadeshepar...
"If you look around, you will think this is a normal city and just assume this is the way it always was, not knowing that 10 years ago people were calling it a ghost city, 20 years ago it was just apartments and villages." https://www.google.com/amp/amp.abc.net.au/article/9912186
Short story is some developments work, others don’t, but investing in real estate is one way for people to park money so people still end up buying up all the properties.