Ghost cities springing up near China’s first-tier cities

Ghost cities springing up near China’s first-tier cities

Kao Hang and Staff Reporter

2013-10-22

China’s property prices have continued to boom, but the phenomenon of the so-called ghost cities, a result of high vacancy rates, has been worsening. In the past, the ghost cities were mainly third-tier or fourth-tier cities, but recently first-tier cities have also seen the rise of this phenomenon, with Shenzhen’s neighboring Daya Bay area going into an apparent state of hibernation, ringing alarm bells in relation to the abnormal development of the mainland property market, our sister paper Want Daily reports.Daya Bay has lots of new high-rise buildings which see few residents moving in, in sharp contrast to the lively city of Shenzhen. The city saw an intensive period of construction in 2010, attracting lots of Shenzhen residents to speculate on the property market there, but now the number of houses there has almost matched the city’s population. Land earmarked for construction projects in Daya Bay will grow sevenfold by 2020, with population expected to grow sixfold, according the local government. The high vacancy rate, however, highlights the risk of property bubbles.

The previous “ghost cities” were mostly located in Inner Mongolia and the northeast, but Daya Bay’s case illustrates that the phenomenon of ghost towns can affect the neighboring districts of first-tier cities, which is a bad omen for the property market.

Guiyang, Guizhou province’s capital city, also saw a high vacancy rate in new buildings after heavy speculation in the property market there last year, triggering worries over creating new ghost towns, according to a recent Xinhua report.

Guiyang’s property market has been enjoying a boom, attracting investments from mine owners and coal suppliers from other parts of China, with some new projects claiming to be able to house 500,000 residents, Xinhua said.

Although Guiyang’s property market didn’t see any sharp fall in prices, part of the city runs the risk of becoming a ghost town, with lots of the new buildings towering at 40 stories but equipped with only three elevators that take at least half an hour during peak office hours.

In the past, Fengdu was the only celebrated “ghost city” in China. Now, as China accelerates its urbanization efforts, 12 new ghost cities have been created with few inhabitants, including four in Inner Mongolia and even two in the prosperous Jiangsu province, as Want Daily reported in mid-July.

According to China’s Terminology Committee of the National Science and Technology, a ghost city is a geographical term referring to an abandoned city with depleted resources. Now, however, the definition has been expanded to describe any city with a high vacancy rate, few inhabitants or that is dark at night.