In 2009 Al Jazeera reported on an empty new residential district in Erdos, Ningxia province, referring to it as the "ghost city". Ever since then, many "ghost cities" or "ghost towns" have been reported around China. Some people claim that the Chinese government is building for no other reason but booming its GDP growth. Others, like journalist Wade Shepard, argued that ghost cities are a temporary phase during China's urbanization process.
Kangbashi, Erdos, the first ghost town Streets looked empty in 2009
The same place in 2015
Streets were packed with cars
However, when it is said that a new ghost city has been spotted only 100 kilometers away from Beijing, many people are concerned whether it means that the real estate bubble is finally blowing up. To learn more about it, I paid a visit to Jingjin New City, a residential district the size of 33 Tiananmen squares between Beijing and Tianjin.
The first thing anyone would notice stepping into Heyuan district of the New City, is that there are definitely people living here:
Yet the second thing you would notice is that, the vacancy rate is really high.
Some houses are probably under construction, but from outside they look abandoned, looking strange comparing to their neighbors.
Mr. Wang the senior sales manager from Heshengchuangzhan, the developer company of Jingjin New city, explained to us the vacancy rate:
According to various reports, Heshengchuangzhan is suffering from a deficit of more than 10 billion yuan on the New City project. If they've sold out all houses, why the deficit? The question start from where the land come from. Mr. Tong, a motor taxi driver shared with us his experience. He was a farmer, and developer gave him 2 houses in exchange for his land.
But the developer isn't really making money from the exchange. What's the logic behind urbanization and ghost cities in China?
Chinese government, who plays the largest role behind "ghost cities", is seen as an assurance by many developers. Even Heshengchuangzhan, who has lost billions due to the slow progress of Jingjin New City program, still holds faith that government will encourage the high-speed train system construction and boom the market again. For now, we can only say that while Beijing is still safe from the real "ghost city" effects, signs have shown that real estate market is starting to see some struggles.
