China's ghost cities
Properties are snapped up by investors, but many remain empty
By Ho Ai Li , CHINA CORRESPONDENT
There are no traffic jams and few pedestrians on the broad streets of Kangbashi district in Ordos City, where many people have bought homes they do not intend to occupy. -- ST PHOTOS: HO AI LI
ORDOS (INNER MONGOLIA): A public theatre shaped like the traditional Mongolian head-dress, a library building in the form of three books, and a museum that looks as shiny and abstract as the renowned Guggenheim Museum in Bilbao, Spain.
Kangbashi, a district in Ordos City, Inner Mongolia, does not lack iconic buildings. Nor does it lack housing.
Surrounding the public buildings in the 32 sq km district, neat rows of modern apartment blocks and townhouses shine under the desert sun as sports utility vehicles cruise along its broad avenues - a picture of middle-class idyll.
But when night falls, the lights do not come on in most of these homes. The houses have been sold but their owners do not live in them.
'They call it a 'ghost city'. In the daytime, it looks beautiful. At night, the houses have no lights,' said Ms Liu Qilong, 46, a long-time Inner Mongolia resident.
It's the same in many places across China, with people buying apartments with no intention of occupying them or renting them out.
A survey by the state grid company, reported by Chinese media earlier this year, showed that as many as 65.4 million homes did not use any electricity at all - which suggested that housing which could accommodate nearly 200 million people was not being put to good use.
With investment options limited in China, and bank savings exposed to the ravages of inflation, many prefer to park their money in property.
And property has proven to be a good investment vehicle, as China's nationwide housing index has shown a rise of 10 per cent each year since 2001, noted Mr Michael Kurtz, head of Asia strategy for Macquarie Securities, in a column in The Wall Street Journal.
Add to that the virtually zero cost in holding on to property - no annual property tax, for instance - and home owners are content with letting their properties stay empty until divested. The result is the emergence of unneeded housing, or sold homes which are left empty.
This has in turn created 'ghost cities' such as Kangbashi in Ordos, as well as pockets in cities such as Beijing, Tianjin or Guangzhou.
Jin Jing City, a spacious development between Beijing and Tianjin which includes golf courses, hotels and housing for half a million people, is also reportedly dead quiet at night. But perhaps nowhere are the excesses of China's property boom better reflected than in Ordos - the boomtown in the middle of nowhere.
A city of about 1.6 million people, Ordos hit pay dirt in recent years as demand for its coal soared. It boasts one-sixth of proven coal reserves in China, as well as a third of its natural gas reserves.
In terms of income per capita, it is China's second richest city, behind only Hong Kong, with average earnings hitting US$19,679 (S$25,557) a year.
Building cranes can be seen all around the city, which opened its first airport three years ago, a connection to business hubs such as Guangzhou and Beijing.
Not content with remaking the older and more crowded districts, Ordos' government lined up plans to build a new district from scratch six years ago.
The outcome was Kangbashi, which cost up to 17 billion yuan (S$3.3 billion) to build and was supposed to be more alluring than the older Dongsheng district as it was nearer the river, brand-new and less congested.
Houses were quickly snapped up and more were still being built. The houses here have all been sold, a taxi driver surnamed Guo, 30, pointed out to The Straits Times as he drove past yet another site under construction. But far fewer people than expected have settled there in the four years since the Ordos government moved into it. Kangbashi was projected to have 100,000 residents by this year. But only 28,000 people lived there as of April, reported China Daily.
Ms Chen Li, 40, a housewife who moved to Kangbashi only about a month ago, said: 'At night I never come out because the occupancy rate of my housing area is not very high. I'm a bit scared of going out.'
Like many civil servants, her husband used to commute about 50km every day between Kangbashi and the older district of Dongsheng, where their old home was. The family moved to the new area only for their son, who attends a well-known secondary school in the new district.
'It's not very convenient to buy things here,' she said.
Ms Chen was one of a handful of people spotted visiting the library on a recent weekday afternoon. In the Xinhua Bookstore inside the library, there were only four to five customers.
All was quiet inside the 47,480 sq m exhibition and convention centre shaped like a Mongolian tent, which has three exhibition halls and a multi-function centre that can seat 900 people.
'Everywhere else in the world, cities are built after people congregated. But here, they build first before people congregate,' mused Mr Guo Qingfeng, a civil servant, during a visit to Kangbashi.
Professor Bao Guangcai, an economics expert from the Inner Mongolia University, said: 'My personal feeling is that it's a kind of waste, a kind of planning error.'
For Inner Mongolia University student Li Nan, 20, Kangbashi may be quiet compared to elsewhere, but is not a bad place to live. He stays in the dormitory on his campus located in the district, and spends his free time watching movies at the local cinema or going to the library.
'It's not that bad, just that there are fewer people. It's not that scary,' said the undergraduate.
hoaili@sph.com.sg
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