SimCity China: The Creation of Ghost Cities

10 May

A new phenomenon is occurring across China as a result of attempts by central government to maintain high economic growth. This has involved the building of numerous new cities at a rate of 12 to 24 annually. As China is a command economy the government simply dictates where resources are spent and will set GDP targets for provinces to meet with the easiest way to do this through building. This has however led to the creation of an astronomical property bubble in which 64 million apartments as well as hundreds of shopping centres have been built and then left deserted. This is because most of the apartments built are overpriced and too expensive for those who actually need them and are instead purchased by middle class investors who then fail to find tenants. An example is Daya bay in Guangdong which has the capacity to hold 12 million people however 70% of new apartments in the city remain unoccupied. In pre-established cities like Beijing a worrying irony is also developing in which areas of cheap and overpopulated housing are being destroyed to make room for more upmarket apartments which will remain uninhabited as no one can actually afford them.

Fig. 1: Nova Cidade de Kilamba just outside of Luanda, Angola

This is not only happening in China however. In Angola where China International Trust and Investment Corporation (CITIC) has large economic interests and investments, a vast complex of 750 eight-story apartment buildings, a dozen schools, and more than 100 retail units have been created just outside of Angola’s capital city of Luanda. Similar to the new cities built in China this area has remained unoccupied, yet further satellite cities are being constructed around Angola.

http://articles.businessinsider.com/2011-03-21/markets/29978136_1_china-real-estate-daya-bay-wen-jiabao

http://www.businessinsider.com/chinese-built-ghost-town-kilamba-angola-2012-7?op=1

http://www.news.com.au/business/china-building-mega-cities-but-they-remain-empty-sparking-fears-of-housing-bubble-burst/story-e6frfm1i-1226611169281

http://www.ccs.org.za/?p=1708

http://www.youtube.com/watch?v=wm7rOKT151Y

Advertisements

2 Responses to “SimCity China: The Creation of Ghost Cities”

  1. de1g11 May 10, 2013 at 4:46 pm #

    The article raises the major point about how these empty towns could lead to the Chinese property bubble bursting. However what would have been interesting to cover is why these cities were made. As the majority of the of Chinese live in the countryside then there is not much wealth for people to buy properties unless you are the small middle class. it would have been smarter for the developers to build cities catered to individuals with smaller incomes, this would have led to a smaller profit for the developers but would have filled the cities and towns rather than leaving them empty.

  2. jc35g10 May 14, 2013 at 4:48 pm #

    I agree with the previous comment. These developments were completely unnecessary and a waste of time, money and resources. With China’s large overcrowding problem, it would have been more beneficial to build more affordable accommodation which can actually be used rather than left abandoned. It is hard to see how these ‘ghost cities’ will be put to use now. It is clear that the Chinese have tried to build desirable homes in which prosperous communities will form, but this is not the reality. The Chinese have developed something which was completely unneeded, and the fact that more are set to take place is farcical, as it will exacerbate the amount of homeless people and create an even bigger housing problem as nothing will be affordable.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: