China's Ghost Cities... Are Multiplying
The fact that China has an unprecedented excess capacity glut, also known as an epic overinvestment/construction bubble, is by now well-known and acknowledged by even the most ardent Chinaphiles. Perhaps nowhere is China's outlier nature in this regard more obvious than in the following chart showing per capita cement consumption vs GDP.
Yet nowhere is China's historic misallocation of capital (resulting from a pace of credit creation that makes even the most fervent Keynesian western central banker green with envy) more evident and tangible, than in videos showing the tumbleweeds floating down the main streets of its ghost cities. We did that first in 2009, then followed up two years later only to find nothing has changed. Today, on yet another "two years later" anniversary, we go back to the scene of the excess capacity crime, to find out if thing may have finally normalized. For that we follow SBS' Adrian Brown who back in 2011 did an extensive report on what were some of the then unknown ghost cities dispersed across the mainland.
What we find is that not only is the overcapacity problem nowhere close to being resolved, but that 20 new "ghost" cities are taking shape in this year alone. Full video report after the jump (click on the Chinese Eiffel tower for more).
Among Brown's findings:
There’s already a near deserted replica of Paris complete with its own Eiffel Tower and Champs Elysees, while even levelling a range of 700 mountains can’t stand in the way of another vast new conurbation. With China’s population and prosperity growing at a rapid rate, Adrian also asks an expert if it’s all good urban forward planning or an economic bubble that’s about to burst.
For the visual learners, here is a Google Map summary of the "cities" in question:
Tianducheng is a replica of Paris, complete with its own Eiffel Tower, grand boulevards and French-style architecture.
The image of the South China Mall in the southern city of Dongguan is partially obscured by cloud, but its scale can still be seen.
Ordos is one of the most famous ghost cities. Closer inspection shows its massive scale, but the lack of cars on the streets.
Lanzhou New Area is currently being built near the existing city of Lanzhou. The surrounding landscape shows why 700 mountains needed to be levelled to make way for it.
In his blog, Adrian explains how Chinese authorities were less than overjoyed to learn that their GDP boosting tactics were once again becoming the focus of media attention:
China, frankly, has grown weary of endless reports about its severely under populated cities. That’s why the provincial government of Inner Mongolia refused to issue me with an invitation letter. Maybe they'd seen my earlier Dateline report on China’s Ghost Cities.
Anyway, the coaxing and cajoling failed, and no letter was forthcoming. So in the end I had to visit Ordos and its Kangbashi New Town unofficially.
Arriving in the city, I am struck by the similarity with North Korea's capital, Pyongyang. Wide, empty boulevards. Grandiose architecture with confused themes. And an eerie shortage of people. At times you have to pinch yourself and say, "Yes, it's real.”
Our cover was blown within a few hours of arriving though. My tour guide was suspicious of my endless questions about why the place was so empty. Eventually her boss turned up, along with an official from the Public Security Bureau.
After checking my passport, their suspicions were confirmed… no journalist visa. Strangely I was told that while this meant I did not have permission to talk to anyone, I could continue filming.
But eventually, it was clear I had overstayed my welcome and was told I would be driven to the airport… just four hours after arriving. I was being politely deported from China’s biggest ghost city. I joked to my guide, “but don’t you need people.”
“Yes, but not like you,” she replied sharply.
* * *
In this lunar landscape they are are levelling 700 mountains to build a 130,000 hectare metropolis from scratch. Up to a million people will eventually move in.
The new city’s Deputy Mayor, Guo Zhiqiang, told me the city will not repeat the mistakes of Ordos.
It will simply make a whole bunch of new ones.
For those curious about China's epic failure at recreating Paris and merely mimicking other global landmarks, here is some more reporting from ground zero:
Take a look at this picture for a second. You know where that is, right?
That's Paris, obviously. There's the Eiffel Tower, and there are some of those quaint Parisian fountains and buildings. Yeah?
Nope. In fact, that shot was taken nearly 6,000 miles from the City of Lights. So... what's the deal?
That's actually Tianducheng, a luxury real estate development and Paris look-alike that's located in Hangzhou, China.
Tianducheng lacks much of what Paris has to offer though -- including people. The development is now more or less abandoned, giving it an even eerier, ghost-town feel.
According to the Atlantic Cities, Tianducheng has been in the works since 2007. The area, however, hasn't seen much success yet. While the development could accommodate 10,000 residents, it is largely uninhabited.
The lack of people is mostly attributed to its odd location. Tianducheng is surrounded mostly by farmland and odd dead-end roads that snake throughout the countryside.
The Paris copycat is actually a pretty impressive clone of the real thing. The 300-foot Eiffel Tower replica looks pretty realistic, though it's only about a third of the size of its French counterpart. By comparison, the Las Vegas replica at the Paris Las Vegas is half-scale and clocks in at 541 feet.
China is no stranger to lookalike locations and pop-up cities. From the Venetian water town, also in Hungzhou, to French chateau replicas to fake beaches at the recently opened New Century Global Center, China offers the opportunity for a whole lot of eyebrow-raising moments. The Chinese amusement park Window of the World features a number of replica structures -- including the former World Trade Center buildings.
Finally, when we follow up on China's ghost cities, ghost growth, and ghost economy in yet another two years, we expect to find much more of the same.
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