China's Ghost Cities: Satellite Images Of Vacant Chinese Regions

businessinsider.com:

The hottest market in the hottest economy in the world is Chinese real estate. The big question is how vulnerable is this market to a crash.

One red flag is the vast number of vacant homes spread through China, by some estimates up to 64 million vacant homes.

Read the whole story: businessinsider.com

Comments

[JCCross]

02:05 AM on 12/20/2010

Well, these developments are all empty, because China's population is so low. Don't worry, as soon as they start having babies, these towns are going to fill right up!

[CANTHATBE]

08:44 PM on 12/19/2010

sounds like long term planning. Nothing the USA would know anything about.

[erdalesin8]

09:51 AM on 12/19/2010

All of the economistes in the world seem to know how to deal with a small economy in crisis. It appears that they do not have a clue for a big economy in crisis like US economy or EU. God forbid, if China goes under...If there are two economists in the room, there are three opinions....

[realitytrumpsbull]

03:57 AM on 12/19/2010

Looks about the same as deserted suburbia here in this country. I think eventually, China will grow into its' 'ghost cities'.

[sonoffestus]

08:25 PM on 12/18/2010

Long term planning as opposed to the USA where the next quarter is paramount. China will trip and stumble , but so did the States and every other developing industrrialized nation. The States will have more downs and a few more ups, but ultimately it will end up similiar to post WW Britain. China will be a super power. One day the US will wake up to discover the Chinese have been quietly buying up the world. They will not need to go to war. The USA is well on its way to shooting its load. My first trip to China was close to 30 years ago. I returned home and told my wife we would all be working for the Chinese in 50 years. I think they're pretty much on schedule.

[tones]

05:11 AM on 12/19/2010

You should read the rest of the articles they have up about china. You'll prob change your mind after wards.

This isn't long term planning its unnecessary buildings (some in the middle of a desert) to keep their GDP on the up and up.

[singermuse]

07:42 PM on 12/18/2010

Interesting paradox: The reason these cities in China are deserted: no jobs there, and the people who live in the other urban areas can't afford to move. The reason we're seeing entire neighborhoods HERE becoming empty is that once, there were people, but foreclosure rendered them homeless. In China, the people at least have a place to live, but here, people are ending up on the street or in their cars or on their relatives' couches. Which one is the Third World Nation Now??

[Yoda]

06:12 PM on 12/18/2010

I know why... The Chinese are not in China because they are occupying spaces else where like Southern California and Vancouver Canada. In fact, they are transforming some parts of CA into mega-Chinatowns.

[lcr999]

01:31 PM on 12/18/2010

I think there was a movie about this....

Build it and they will come.

[melton244]

02:30 PM on 12/18/2010

I think there is another story about this, where did ALL our money go in America? Building empty cities by Wall Street.

[AlexABC]

02:51 PM on 12/18/2010

Here is something to think about:

http://www.nytimes.com/2010/12/18/world/europe/18spain.html?_r=2&hp

Spain once had an insatiable construction boom which included the building of entire cities from scratch: after all, prices would only go up, right? And the migration to the cities would never stop. Build it and they will come!

Now, consider that most of China already lives in an urban area, that there is no housing shortage (there is literally enough floor space in the country to give every last citizen a cubicle and then some), and that these new projects are often on real estate that is priced far beyond the means of the average Chinese.

China makes Spain look like a blip, esp. in light of how at least the average Spaniard makes enough (relatively) to give the semblance of dabbling seriously in real estate speculation, and that Spain is a developed economy with a social safety net. It is hard to say when the China construction boom will end, but it will not be pleasant when it does.

[lcr999]

10:01 PM on 12/18/2010

This is a big difference between China and the rest of the world.

As capitalists, we look at this as a massive, wasted, or at least unused investment.

The Chinese look at this as an investment in the future THAT REALLY DIDNT COST THEM ANYTHING. What did it take to build those entire cities.....Manpower and natural resources......of which they have plenty of both. Not a ton of those entire cities was made outside of china so there was no external payments. Kind of like building the pyramids. Just mobilize the workforce and do it.

Their human rights abuse and lack of freedom asside..............And you have to marvel at the ability to plan and build a whole city at once. In the US we would build a road, build a building, then another one, then 10 years later rip up the road and put in a bigger one, then rip up the road to put a new sewer in it, then somebody would buy the building and tear it down and build a bigger one, the we would rebuild the road again, etc etc.....

Building whole cities... building high speed rail....building massive wind and solar power infrastructure...all infrastructure for the future. ............... we are building nothing but wal mart stores. We are so screwed.

[realitytrumpsbull]

04:08 AM on 12/19/2010

Difference in the US is, we do things in stages, and the public has a say and a vote, and there's no one poking you in the back with a Kalashnikov to help encourage you to vote for the new construction bonds.

China unfortunately has a reputation for securing compliance with government policy and initiatives/plans and so forth, by whatever means necessary.  In the US, if you tried that, you'd have a riot. 

In times of old, (watch Grapes Of Wrath), poor people got chased off their land by the company men, the land was seized, the people removed.  That was here in the US. What has become of the people whose homes and apartments were basically razed to make way for New China? Did they disappear quietly into the hills? 
Sometimes, 'urban renewal' plans and so forth don't actually involve the current inhabitants.

[JackTheSkipper]

08:42 PM on 12/17/2010

I am glad my dollar is being put to good use.

[Ted Bouklos]

01:49 PM on 12/17/2010

Well given that by 2030 an estimated 350 million Chinese will move from rural areas to cities 64 million homes won't be vacant long. In fact china plans on building 10 NYC sized cities by 2025 to fill the demand. The economic potential is staggering. The drain on steel and other raw material resources to build these cities is even more staggering.

[TYRANNASAURUS]

11:35 AM on 12/17/2010

China's Ghost Cities: Satellite Images Of Vacant Chinese Regions......

China is still a totalitarian state where many bad ideas come down from the the top leaders......just reminding you in case you were blinded by the glitter of the Olympics.

[Shomali]

07:04 AM on 12/17/2010

The middle/inner part of China has a long way to go to get fully developed. This is all about accelerating development. The chinese instead of incrementally improving facilities (in some cases non existing facilities) and building infrastructure in existing towns, have decided building whole towns from scratch, outside these towns, which is considerably more efficient in bulding, and less costly. The "ghost towns" usually get populated as soon as industries in and around the towns are moved in. Chinese have been doing this in the past 10 years and accelerated it in the past 5. The Chinese have announced they will spend $1.5 trillion on infrastructure such as super-trains, airports and roads,etc, to interconnect all their cities. I guess it good to have a whole lot of money.

[singermuse]

07:48 PM on 12/18/2010

While they build and improve their infrastructure, ours is decaying in to dust. Katrina was just a taste of things to come. Without needed revenue from the uber-wealthy (in taxes), there will be no funds for roads, bridges, levies, dams, nuclear power plants, school buildings, postal services, public hospitals, etc... We are getting further and further behind the rest of the world, and they are decades ahead of us.

[SolarPowerGuy]

04:48 AM on 12/17/2010

Bizarre.

I went looking for more information on these Chinese ghost towns, and I came up with this article:

http://www.foreignpolicy.com/articles/2010/02/18/chinas_high_growth_ghost_towns?page=0,0

"In a paradox only possible in today's economic system, Kangbashi manages to be both a boom town and a ghost town at the same time."

[Ted Bouklos]

01:56 PM on 12/17/2010

It's not that bizarre when you consider that china expects 350 million new city dwellers by 2030. It's just efficient and forward thinking to plan large cities in advance. It's like a SimCity, build it, and they will come.

[SolarPowerGuy]

05:49 PM on 12/17/2010

Plan it, sure.

Build it ALL before anyone shows up to live there? That's the part that doesn't make sense. Idle resources, which nonetheless require maintenance.

[Talossa]

09:52 AM on 12/18/2010

Good analysis. Build it now while labor is still cheap.

[melton244]

02:01 AM on 12/17/2010

Totally amazing, and if anybody is wondering where WALL STREET has been investing, look no further.

[Alan Papacito]

09:26 PM on 12/16/2010

Nice to see that China is doing something useful with the american dollars they are siphoning off through the trade deficit and interest paid back on our debt. They will own everything in the U.S. one fine day, and then we will become THEIR cheap labor force.

[AlexABC]

12:52 AM on 12/17/2010

Much of it is paid for in debt. Independent analyses of China's debt to GDP ratio estimates that it could be higher than the US. There is no bottomless stash of money: even the much-touted forex reserves are unable to be used in crucial transactions such as the recapitalization of troubled banks.

Contrary to popular conception, China is one of the most urbanized and industrialized countries in the world. It is not some mostly rural, spread-out amalgam of peasants who will flock indefinitely to cities and hence justify the construction boom. Due to how it categorizes an "urban" area, China vastly understates how many of its citizens already live in large cities: by China's metric, Houston or Brisbane would not be counted as "cities." Here are some other examples of "non-cities" in China, where allegedly hundreds of millions of peasants are going to migrate someday to a real city:

-Qiaotou; pop. 64,000; manufactures 60% of all buttons and 70% of all zippers.
-Songxia; pop 110,000; manufactures 500 million umbrellas per year.
-Shaliuhe, where 26 cement factories were dynamited in the run-up to the Olympics, and the "village" steel factory workers were given an early vacation.

Are these not "cities"?

There is no housing shortage in China. When 60% of GDP goes to investment, overcapacity exists, and it has led Edward Chancellor to ridicule the "build it and they will come" mindset.

Sources: http://fundville.com/blog/2010/03/gmos-edward-chancellor-china-red-flags/

[Alan Papacito]

01:30 PM on 12/17/2010

An excellent and reasoned response. Nice to see some intelligent dialog on this site from time to time. I am still trying to work out all of the pieces of the global financial network and how it works (or doesn't work).

F&F!