Boomtime on China's grasslands


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    Mongolian newlyweds wearing traditional garb in front of their modern possession: a new Porsche Cayenne. Many here are partaking in the riches of a booming economy built on coal and natural gas.

    - Rob Schmitz / Marketplace

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    High-rise apartments, some finished, some still under construction, stand empty in the new city of Kangbashi.

    - Rob Schmitz / Marketplace

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    The new city of Ordos is complete with hospitals, museums, and concert halls.

    - Rob Schmitz / Marketplace

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    Statues honoring Mongolian ruler Genghis Khan fill Kangbashi's public square.

    - Rob Schmitz / Marketplace

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    A worker is the only soul in front of Ordos's new convention center.

    - Rob Schmitz / Marketplace

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    The new library consists of three, eight-story cement books surrounded by steel and glass.

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    Another view of Ordos Library

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    The new Ordos museum looks like a space-age blob.

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    A closer look at the new Ordos museum.

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    Kangbashi's Opera House

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    The new art museum of Ordos

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    Government buildings surround Kangbashi's new public square. The city of Ordos recently moved all its government offices here to the new city. It hopes the rest of the city will follow.

    - Rob Schmitz / Marketplace

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    These workers, sweeping the new public square, were some of the only people seen in Kangbashi's new public square.

    - Rob Schmitz / Marketplace

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    The public square for the new city of Kangbashi shows how desolate this city is. The city of Ordos built Kangbashi to house the new city of Ordos. It's built to house more than 300,000 people, but so far, only 30,000 have moved there.

    - Rob Schmitz / Marketplace

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    Omega is just one of many luxury brands that have opened up shop in this boomtown.

    - Rob Schmitz / Marketplace

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    One of several luxury car dealerships in the city of Ordos. With limited investment options, many Chinese in Ordos are putting their money in real estate and luxury vehicles.

    - Rob Schmitz / Marketplace

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    Dozens of cranes fill the skyline of Kangbashi, the new city center of Ordos. Ordos boasts China's largest per capita GDP. It's spent a billion US dollars on building an entirely new city.

    - Rob Schmitz / Marketplace

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    One of dozens of new high-rise complexes in Kangbashi.

    - Rob Schmitz / Marketplace

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    Kangbashi resident Tian Xue Feng walks to his new apartment in this largely empty city.

    - Rob Schmitz / Marketplace

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    Tian Xue Feng stands in the living room of his new apartment. He just bought the apartment for the equivalent of $120,000 USD. He thinks it was a wise investment. He says in five years, Kangbashi will be full of people.

    - Rob Schmitz / Marketplace

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    A look inside Tian's House.

    - Rob Schmitz / Marketplace

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    Tian's kitchen.

    - Rob Schmitz / Marketplace

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    A look at a Kangbashi Street.

    - Rob Schmitz / Marketplace

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    No need to look both ways here. Few people have moved into Ordos's new city, which is built to house the population the size of Pittsburgh's.

    - Rob Schmitz / Marketplace

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    Gigantic bronze horses stand in the middle of Kangbashi's enormous public square.

    - Rob Schmitz / Marketplace

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    A sign for a new subdivision in Kangbashi

    - Rob Schmitz / Marketplace

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    Much of Ordos is under construction. City leaders are confident the population will fill the many vacant buildings that stand in the city.

    - Rob Schmitz / Marketplace

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    The scale model map of a planned automobile industrial park for the city of Ordos.

    - Rob Schmitz / Marketplace

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    At around 20 sq. km, this planned automobile park is the size of a city. It'll require the equivalent of hundreds of millions of US dollars investment.

    - Rob Schmitz / Marketplace

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    Empty Spanish-style villas on the outskirts of Kangbashi.

    - Rob Schmitz / Marketplace

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    Another bronze statue honoring Mongolian ruler Genghis Khan

    - Rob Schmitz / Marketplace

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    A sculpture in Ordos

    - Rob Schmitz / Marketplace

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    An advertisement for an apartment complex in Ordos seems to have been written just as quickly as the city is growing.

    - Rob Schmitz / Marketplace

TEXT OF STORY

Bob Moon: We got word at the end of last week that the American economy is still lumbering along at an annual growth rate of only 2 percent. China's GDP, on the other hand, is racing ahead at more than 9 percent a year. Coal is the fuel behind that growth, and most of it comes from the Chinese province of Inner Mongolia. It was once one of country's poorest areas, but now, the Inner Mongolian city of Ordos has the highest economic growth per capita of any city in China.

Our China correspondent Rob Schmitz has the first of two reports on the "Boomtime on China's Grasslands."


ROB SCHMITZ: A decade ago, people here in Ordos got around by tractor, horseback or they simply walked. These days, they prefer Land Rovers, BMWs or, if Liu Yongxi has his way, Porsches.

Liu Yongxi speaks in Chinese

Liu shows off a retrofitted Porsche to a customer at his dealership. The car costs $350,000. He says he sells two of these a week -- usually to mining executives and real estate developers who lug in suitcases full of cash to buy them.

WU JIN PIN: Many people here in Ordos, they became rich all of the sudden. But they do not know where to invest their money.

Businessman Wu Jin Pin wants to help lighten their wallets. The local government has given his company start-up funds to build an automobile industrial park devoted to selling luxury cars.

JIN PIN: You see, this is our big plan.

Wu shows off a 3-D model of the planned park. It's peppered with dozens of miniature warehouses and skyscrapers overlooking tiny green forests. A river with bright blue plastic water meanders through lush green pasture -- it's a landscape reminiscent of the American Midwest. But there's a problem: Ordos is located in a desert.

Wu admits the model exaggerates a little. For example, the bright blue river has actually gone dry.

SCHMITZ: There's no more river?

JIN PIN: No river, never. On our plan, we are going to build an automobile park, like car racing.

SCHMITZ: So you'll be able to race your cars down the dry riverbed, then.

JIN PIN: Right. This autopark will be number one in China.

Before it's number one, though, a development on this scale is going to need some major investment, about $600 million.

SCHMITZ: And you've secured that investment?

JIN PIN: We can manage to do it.

Wu gives me a self-assured, almost cocky smile. It's a smile you see on many faces here. A massive infusion of capital's behind it. Ordos produces a sixth of China's coal and a third of its natural gas. The region has become rich by supplying the fuel for China's development boom. But it's also fueled an obsession to build monumental projects that are difficult for visitors to comprehend, like this one.

Drilling

Workers put the finishing touches on the new city of Ordos. You see, Ordos has so much money that city leaders want to move the population 15 miles away to a location with better access to water. The government spent a billion U.S. dollars to create an entirely new city, called Kangbashi. It's got an enormous public square, museums, concert halls and row upon row of high-rise apartments, just waiting for people to move in. Problem is, nobody seems to have gotten the memo. Just 30,000 people live in a city built for 300,000.

Tang Lina is one of them. She admits living in a city the size of Pittsburgh that's largely vacant is starting to become spooky.

TANG LINA: Life isn't very convenient here. The nearest supermarket is half an hour away. My main concern is what'll happen now. Will people start to move here? There are still a lot of empty properties.

The Ordos government ignored requests for an interview. They've told the Chinese press, though, to give it time. The region's population is currently at 1.5 million, and growing quickly. In the meantime, the new city will have to stand empty and wait.

PATRICK CHOVANEC: The factors that have led to a ghost town in Ordos are factors that are actually present throughout China.

Tsinghua University business professor Patrick Chovanec says Ordos might be lonely, but it's not alone. There are several other empty swaths of urban China. They're the result of having a lot of money, but nowhere to park it. China has a closed capital account, which means people can't invest outside the country. Playing the stock market's too risky. They could put money in the bank, but they'd earn less than 2 percent interest. That's less than the inflation rate.

CHOVANEC: People are flush with cash and they don't really have that many outlets for it, so they have to put it somewhere. And in the Chinese economy right now the only place you can put it and feel somewhat confident that you're retaining your value is in real estate, even if you're buying 10 empty units in a city that nobody lives in.

Tian Xuefeng exudes this confidence. The 40-year-old spent the equivalent of $120,000 on this modern-looking three-bedroom apartment in a mostly empty city.

TIAN XUEFENG: Now I have two cars, a laptop and I live in such a big apartment. I'd never ever thought about all these when I was young. My dreams have come true.

Tian says the city may be vacant now, but just watch, he says. In five years, it'll be full. Tian rolls his eyes when I bring up all the property here bought by speculators.

Tian speaking in Chinese

How can that be a problem, he asks. And then he points at me. People in your country, he says, slipping into an almost lecturing tone, they speculate too.

Reporting from Ordos, Inner Mongolia, I'm Rob Schmitz for Marketplace.


Moon: Tomorrow, Rob continues his look at the "Boomtime on China's Grasslands." You can also hear more on tomorrow's Marketplace Morning Report -- and check out Rob's photos of Inner Mongolia.

About the author

Rob Schmitz is Marketplace’s China correspondent in Shanghai.

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