The Ghost Cities of China
A unique economic situation has slowly revealed itself in China, as google satellite images and various reports show fully constructed modern cities standing completely deserted.
The economic motto here appears to be, ‘money is no object’. Despite a labor shortage in the south due to the investment in rural areas, despite sagging exports last year, there remains enormous pressure to reach target GDP growth. That means spending and investment in infrastructure.
The world saw the first signs of this during the 2008 Beijing Olympics, where $44 billion dollars were invested in new venues such as “Birds Nest Stadium”, many of which sit unused today, some of which, including an entire baseball stadium, were simply demolished after the games.
There remains enormous pressure to reach target GDP growth. That means spending and investment in infrastructure.
Today, the name of the game continues to be investment in real estate. In order to show economic growth, the pressure is to spend and invest, in anything and everything. They certainly have the capital, as debt grows in other nations and loans are handed out, so to are entire cities being constructed, all with the goal of meeting the bottom line, and hitting that government set target 8% GDP growth.
Take Ordos, for example. The name meaning “palaces” in the Mongolian language, Ordos is an ultra modern city, glass walled buildings, government offices, designed to hold a million people, yet virtually empty. To walk the streets here is truly a surreal experience. The original city, is about 25k away. Most of the apartments in Ordos are owned, but not occupied. They are viewed as good investments, as the saying goes, no one has lost money in China in real estate.
Mostly the only people that live in Ordos are construction workers. Without residents, no business can succeed, and property prices appear to high to actually move here, so it stands, a economic Catch 22. Thus rows of ultra modern residences stand empty, dedicated bus lines and stations sit with no routes assigned to them. Virtually more of the embodiment of an investment bank rather than a city.