The Ghost Cities of ChinaBetting on an Urbanized Future

Kangbashi New Area, Ordos, Inner MongoliaThe Dubai of China

• Designed to accommodate 1,000,000 Residents

• Construction fueled by speculation on coal industry

• Population: 70,000 (Mar 2013)

Source: Lian Su, Mayor of Ordos

Yujiapu, Tianjin Little Manhattan

• Previously set to be the world’s largest financial district rivalling Manhattan, complete with its own Rockefeller Center, and World Trade Towers

• Construction has been almost completely abandoned because developers have been unable to pay back loansSource: CBS News, 60 Minutes

with Lesley Stahl: China’s Real Estate Bubble (Aug 11, 2013)

Paper Perfect: the Case of Huaming

Source: New China Cities: Shoddy Homes, Broken Hopes by: Ian Johnson of the New York Times (Nov. 9, 2013)

• Huaming was featured at the 2010 World Expo in Shanghai as an example of how urban planning was being used to improve the lives of rural people

• 41,000 people lived in 12 villages around the township • The idea behind the project was simple: by urbanizing residential areas, villagers

could live comfortably on 1 Sq. Mile, a third of the land they occupied currently • By employing modern farming techniques, the town could raise crop yield while

paying for the construction of Huaming by selling the remaining land to developers.• Villagers would be given the same amount of space in an apartment complete with

modern amenities at no cost to them

Logic Behind the Project

The Reality • The government forced people to move out of their former homes by

cutting electricity and water, and bulldozing all of the local schools• When they arrived, they found shoddy construction. Much of the

money meant for the project had been lost to corruption• Villagers were not qualified to work in the offices in nearby Tianjin, the

place local authorities pointed to as a source of employment. Lack of job opportunities led to social problems of alcoholism and suicide.

Reasons Behind Construction• Economics – Party leadership views China’s dependence on export based

activities for growth as unhealthy in the long term and are looking to tap into domestic consumption

• Urbanization would boost consumption, especially among the growing middle class

• Open up vast swaths of land for profitable enterprise

Source: China’s Maoist Vision: A City of 260 Million People by Gordon Chang of Forbes Magazine (June 23, 2013)

Criticism • Many of these new cities are not

tied to any productive enterprise

Source: Xiang Biao, Professor, Oxford University

• Half of China’s population lives on around 2 US Dollars a day while most apartments cost upwards of $50,000 US Dollars

• Cities are being built for middle to upper middle class investors. Investments are based on speculation that real-estate prices will continue to go up

Source: Gillem Tulloch: Hong Kong Based Financial Analyst and Reasearch Director at Forensics Asia

The Bohai Economic Rim • Would Consist of an Inner Ring and an

Outer Ring, including 8 Major cities with a total population of more than 67 Million People

• The main urban center in the region would have a population of some 100 Million people

• The Tokyo Metropolitan area is the most populous urban center in the world today with a population of 37.1 Million

Source: Forbes, Nextbigfuture.com

Conclusion The Chinese development program has been compared by proponents to President Eisenhower’s plan to build the U.S. Highway system. The Chinese government has the resources to provide for the needs of its people and expand opportunities to meet their aspirations. To do this, they must follow a few basic principles. Firstly, create supply only where demand exists. Secondly, do not encourage speculative investment. Finally, provide what local people can afford. Development is a process that has many steps. China must recognize where its people are in that process and resist the temptation to skip vital steps in the process of development.

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