It’s worse than that. They have unfinished projects with units that have already been bought on mortgage. You have people making monthly payments for unfinished apartments (and I don’t mean just unrenovated, which is expected).
That guy who was banned from trading in Hong Kong in 2016 for shorting the stock in 2012 must feel vindicated, at least.
Many of them aren't second homes. The ones in the ghost cities sure, but Evergrande has (had?) more legit projects that were designed as actual housing. In any case, given that the mainland stock market is pretty much known as a sham, real estate has been the only investment option for much of the middle class. Investors "eating" their losses basically means huge widespread social upheaval in China. Imagine everyone being equivalent to their 401k going belly up, that wouldn't be pretty.
There is much about China that I don't understand, but I'm curious about the ownership in the "ghost cities".
Given the ability of the CCP to significantly control major industries and movement of people, is it not possible that someone might buy an apartment in a "ghost city" while living in a rural area or renting in another city, expecting that people and jobs would flow to the city once it was completed?
Basically I don't really understand all the details, nuance and different corporate and governmental players involved in the "ghost city" phenomenon, but I'd almost expect that the government could make a "ghost city" into a "real city" in no time, by shutting down factories in one city and opening them there, or by changing internal migration restrictions.
>Given the ability of the CCP to significantly control major industries and movement of people, is it not possible that someone might buy an apartment in a "ghost city" while living in a rural area or renting in another city, expecting that people and jobs would flow to the city once it was completed?
>Many developments initially criticized as ghost cities did materialize into economically vibrant areas when given enough time to develop, such as Pudong, Zhujiang New Town, Zhengdong New Area, Tianducheng and malls such as the Golden Resources Mall and South China Mall.[15] While many developments failed to live up to initial lofty promises, most of them eventually became occupied when given enough time.[6][16]
>Reporting in 2018, Shepard noted that "Today, China’s so-called ghost cities that were so prevalently showcased in 2013 and 2014 are no longer global intrigues. They have filled up to the point of being functioning, normal cities".[17]
>Writing in 2023, academic and former UK diplomat Kerry Brown described the idea of Chinese ghost cities as a bandwagon popular in the 2010s which was shown to be a myth.[18]: 151-152
Kangbashi is never filling up like they planned, simply because coal is no longer booming like it once was. You can only do so much when the trend you were hoping for doesn’t pan out. It’s a district designed for a few million holding up at 50k or so.
Tianjin will always have a few ghost districts and skyscrapers. They eventually fill up after a decade or two or are razed for something else. It was like that when I first visited China in 1999 as well.
The Chinese government isn’t as powerful as you think it is, nor as centralized. All of these ghost cities (more like ghost districts) are local government driven, so the central government doesn’t care much to fill them. The local governments can push state activity there, like as happened in Ordos (city) and kangbashi (ghost district of city), but they can’t really control the rest of the economic activity needed to make it a thriving place. In Ordos’s case, the downfall of coal is going to depress the city no matter what, the central government won’t bother to save them.
Few real people buy homes knowing with certainty they would remain empty.
People speculated on new development, future growth, and induced demand. For some reason, people online like to make them martyrs or idiots. lots of schadenfreude.
The reality is a lot more mundane. They were just a risky investment bubble that popped.
> “The finest line of poetry ever uttered in the history of this whole damn country was said by Canada Bill Jones in 1853, in Baton Rouge, while he was being robbed blind in a crooked game of faro. George Devol, who was, like Canada Bill, not a man who was averse to fleecing the odd sucker, drew Bill aside and asked him if he couldn't see that the game was crooked. And Canada Bill sighed, and shrugged his shoulders, and said, 'I know. But it's the only game in town.' And he went back to the game.” — Neil Gaiman
