ORDOS-KANGBASHI GHOST CITY

Why China is building empty cities? We're going to explore the secret behind the massive empty cities that China is building in the last few years sprawling over thousands of square feet. These mega-cities have the potential to be home to millions of people but in reality, there are hardly any people living in them. So let us understand why the Chinese are building these ghost cities even if there's no one living in them.

 INTRODUCTION

We're all aware that ever since the history of humankind cities are normally built around an abundance of resources like clean drinking water or considering modern times, the availability of opportunities like mega manufacturing sites or technology hubs which create jobs but China seems to have been playing by a different set of rules when it comes to building new cities today. There are 662 cities in China out of which roughly 50 cities are considered to be ghost cities since the occupancy rate is way lower than their actual potential these cities are estimated to have empty properties in order of 64 million whereas the total population of China is 1.4 to billion.

THE PAST

One might think that these ghost cities are a recent Chinese phenomenon but if we take a look at China's infrastructural development in the last few decades, it turns out to be a proven strategy for urbanization cities like Shenzhen & PUDONG which were considered ghost cities a few years back are now thriving and have become profit centers for China. Just to give you an idea the city of PADANG, which was considered to be empty back in 1993 has an occupancy rate of 99% today and is considered to be the most populated district in SHANGHAI while SHENZHEN again.

 SET OF RULES

A former ghost city in southern China is today considered to be a Silicon Valley of tech hardware remember that the Chinese play by a different set of rules when it comes to building their cities. here's the rule they follow to build a city bring a factory near or within that city and people will come on their own however bizarre it may sound this reverse engineering has worked for the Chinese in the past and we're about to get into the house and wise behind it but first we'd like to share a traveling tip for those of you planning to visit China. Anytime soon you might be aware of their internet policy meaning you won't be able to access any of the free platforms you currently use but we have you covered that's why we recommend using a VPN.  It's super easy to use a piece of software that protects your data online so the government or other companies can't spy on you and you can enjoy the Internet you know and love. The Chinese people abandon their native homes and move to these empty cities but in the past government initiatives like providing subsidized transport facilities lowering the rent rates and creating jobs by influencing big fat manufacturers to set up a factory within the ghost city have helped to fill up these empty spaces also factors like a volatile domestic stock market unattractive interest rates offered by banks and zero property tax have made real estate a major investment option within the country. This has led to a rise in the number of second and third-time homebuyers in China along with a rise in the number of ghost cities speaking of places where rich Asians are investing in real estate.

GOVERNMENT'S PROPERTY

In China the government owns all the land within the borders of the country and any piece of land can be taken on lease from the government for a maximum period of 70 years.  This aspect is particularly important since no matter whether ghost cities are inhabited or not the land beneath them will always be the government's property in the long term also the term city in China is a legal entity itself in form of a municipality and excises control over everything within its boundaries including the funds received from taxes which makes it less dependent on the funds received from the central government in China and so more lucrative than conserving farmland for those excising control over it but how does this impact the locals with cities spreading rapidly across the country. It's estimated the urban population in China will be around 1 billion in the next 15 years at present the local governments of these empty cities are using the cities as money printing machines and are generating money through land sales whereas young Chinese people who are planning to get married are buying them to showcase, their financial stability in a race to get a better wife now. One might think that things are working fine for both parties but there have been several instances where people have been forced by the government to vacate their ancestral homes and if they didn't budge cities are built around them. Also on average, these empty properties have been valued in a range of 500,000 to 1 million US dollars whereas the average monthly income of a common man in China is 1,100 US dollars which again makes it difficult for locals to buy them without substantial amounts of debt.

HOW DOES THIS IMPACT THE WORLD?

Countries like Australia which are major exporters of resources like iron, and ore are more than happy with the rising number of ghost cities but countries like the USA which already suffered in the past due to the loss of manufacturing jobs to China might have other views. Also, foreigners who have worked or studied in China for the last year are allowed to own property in China but these foreigners can only buy one residential property and they are not allowed to rent it out. So if you're planning to invest in these ghost cities you better think it through will it work in the future although building ghost cities has led to economic booms and urbanization in the past and in the future, this model of development might not sustained for example consider the city of Ordos. One of the famous ghost cities in Inner Mongolia this city was built eyeing up jobs that would be created through coal extraction in the region and still continues to be a ghost city due to the crash in the demand for coal and a lack of stable job opportunities also there is a supply chain issue that needs to be addressed the number of raw materials used for building these cities is gigantic it's estimated that the amount of raw materials used by China in the last three decades is equivalent to the amount of cement used by the USA in the entire 20th century thus in the long run the rising price and raw materials may not justify the scale of ongoing construction conclusion one might think that building empty spaces on such a large scale without a substantial demand does not make economic sense but in reality, Beijing is betting on the income generated through the debt received from the land sales the ghost cities have helped boosting China's economy in the past but in the future, they may not help to sustain the economy in 2018 China's economic growth rate was 6.6 percent one of the lowest after the year 1990 and research has shown that China's economic growth is cooling looks like it's time for China to rewrite the rules once again.