4 ms·

I wonder how this relates to the 'ghost' towns being built over there? Could this be a consequence of the slowing rate of construction of these huge cities/hous

by kelvin0 11y ago

I wonder how this relates to the 'ghost' towns being built over there? Could this be a consequence of the slowing rate of construction of these huge cities/housing projects (no one lives in practically)? That artificial growth is/was not sustainable and the bubble is bound to collapse, or is this simply oversimplified view of the problem?

mikeg8 11y ago
I've always wondered about this as well. Heavy investments in new cities, when there was no demand for them, just for the sake of "increased growth" was always a red flag to me. Interested in any correlation.
- ycombobreaker 11y ago
  I don't have any direct sources for this, but the word that I heard from a friend who spent some time in China recently was the following: - Chinese investors have limited places to park their cash. Stock market and real estate are two major options, and real estate is seen as a superior investment (stock market has... problems, you could say) - Chinese law prevents purchasing property without developing it. - Real estate investments therefore require barebones property development--regardless of tenancy--in order to remain legitimate. Therefore, "ghost towns" are a natural outcome of Chinese investment in Chinese growth. They can remain vacant for a long time and still satisfy the investment goals of the developer. (edit: list formatting)
hodder 11y ago
People often point to the "ghost cities" like Ordos when declaring China to be in a massively overbuilt or "artificial" real estate bubble, yet studies such as those done by Mckinsey below predict 350M more people moving to cities by 2030 [1]. Given NYC has a population of about 8M, it appears China actually needs to build an additional 44 NYC sized cities (or expand existing ones) by 2030. Makes you question weather they really in a bubble? It appears they could fill Ordos and 43 other new cities in the next 15 yrs! Perhaps they need to be putting these cities up even more rapidly. [1]http://www.mckinsey.com/insights/urbanization/preparing_for_urban_billion_in_china http://www.mckinsey.com/insights/urbanization/preparing_for_...

by kelvin0 11y ago

mikeg8 11y ago

I've always wondered about this as well. Heavy investments in new cities, when there was no demand for them, just for the sake of "increased growth" was always a red flag to me. Interested in any correlation.

ycombobreaker 11y ago
I don't have any direct sources for this, but the word that I heard from a friend who spent some time in China recently was the following: - Chinese investors have limited places to park their cash. Stock market and real estate are two major options, and real estate is seen as a superior investment (stock market has... problems, you could say) - Chinese law prevents purchasing property without developing it. - Real estate investments therefore require barebones property development--regardless of tenancy--in order to remain legitimate. Therefore, "ghost towns" are a natural outcome of Chinese investment in Chinese growth. They can remain vacant for a long time and still satisfy the investment goals of the developer. (edit: list formatting)

hodder 11y ago

People often point to the "ghost cities" like Ordos when declaring China to be in a massively overbuilt or "artificial" real estate bubble, yet studies such as those done by Mckinsey below predict 350M more people moving to cities by 2030 [1]. Given NYC has a population of about 8M, it appears China actually needs to build an additional 44 NYC sized cities (or expand existing ones) by 2030. Makes you question weather they really in a bubble? It appears they could fill Ordos and 43 other new cities in the next 15 yrs! Perhaps they need to be putting these cities up even more rapidly. [1]http://www.mckinsey.com/insights/urbanization/preparing_for_urban_billion_in_china http://www.mckinsey.com/insights/urbanization/preparing_for_...