Dozens of skyscrapers under construction in the port city of Tianjin. In ten years, local officials hope the district of Yujiapu will be one of the world's largest financial centers. Parts of the city are replicas of landmarks in Manhattan, such as Rockefeller and Lincoln Centers. Local real estate analysts tell Marketplace that developers and investors are selling their investments in Yujiapu at a loss, nervous about the future of China's economy.- Rob Schmitz/Marketplace
When completed, Yujiapu's geography will mirror Manhattan's, complete with a river on both sides of the financial district, as shown in this billboard. The district attracted funding with help from Zhang Gaoli, former mayor of Tianjin and current Vice Premier of China.- Rob Schmitz/Marketplace
Downtown Yujiapu constitutes one of the largest construction sites on the planet. When built, planners expect up to four million people to move to the area, with 300,000 people working in the financial district. Economists question whether the city will ever finished being built before China's property bubble pops.- Rob Schmitz/Marketplace
A steamroller puts the finishing touches on a road in front of the district's new aquarium.- Rob Schmitz/Marketplace
A propaganda sign outside of Yujiapu reads: "Empty talk will lead the country astray. Only hard work will help the country prosper" Many economists have criticized Tianjin for building Yujiapu, saying the city is taking on too much debt for the massive project.- Rob Schmitz/Marketplace
A migrant construction worker rests beneath one of the dozens of bulldozers that line a street under construction in Yujiapu. Five thousand people lost their land to the local government to build this district.- Rob Schmitz/Marketplace
Boots of a construction worker bake in the sun in front of Yujiapu's central district.- Rob Schmitz/Marketplace
A bulldozer lays idle across the river from Yujiapu in Conch Bay, another development in Tianjin's Binhai district that aims to attract millions of new residents.- Rob Schmitz/Marketplace
A construction worker in Yujiapu. Economists say the city is a symbol of bigger credit problems in China.- Rob Schmitz/Marketplace
Half-built villas stand empty outside of Yujiapu, a district which aims to be one of the world's largest financial centers within ten years.- Rob Schmitz/Marketplace
Economist Anne Stevenson-Yang says the city of Tianjin has borrowed nearly as much as its entire annual GDP to pay for Yujiapu and that after China's property bubble bursts, squatters will most likely live in the shells of the skyscrapers behind her.- Rob Schmitz/Marketplace
A boat travels in front of the district of Conch Bay, across the river from Yujiapu.- Rob Schmitz/Marketplace
Local officials hope to build China's largest high-speed rail station here, a tunnel under the sea, and several subway lines underneath Yujiapu within the next ten years. Economists have serious doubts.- Rob Schmitz/Marketplace
In China, a replica of Manhattan loses its luster
The buildings rising from a saltwater marsh in the port city of Tianjin looks an awful lot like New York City. But don’t be fooled, says Lin Lixue, a dapper young spokesman for a local developer. This Manhattan replica aims to be a bigger Apple.
“Our goal is to create the world’s largest financial center, right here, within ten years," says Lin. "We’re building skyscrapers, we’ve got China’s largest high-speed railway station coming soon, we’re building a tunnel under the sea, and we’ll soon build several subway lines.”
Li sounds like a boy whimsically building sandcastles. And this is a very big sandbox. The city‘s called Yujiapu. It’s now one of the biggest construction sites on the planet. Workers are completing dozens of skyscrapers, many over 50 stories tall.
Zhang Xiaoying is a real estate analyst for Tianjin Centaline Property Consulting. Her job is to advise those who are interested in investing in this area. What is she telling them about China’s next Manhattan?
"Don’t invest here!" Zhang says loudly, "It’s way too risky. Some developers have re-sold entire buildings at a loss just so they can pull out of here as soon as possible. For the projects that are finished, the investors are now pulling out."
The way Zhang sees it, Yujiapu is more Detroit than Manhattan, and it hasn’t even been built yet. So I ask her: why IS it being built?
"Hu Jintao," Zhang says with a nervous giggle.
Under Hu's presidency, China’s economy grew at an unprecedented rate. The formula for much of that growth has been pretty straight-forward, says economist Anne Stevenson-Yang.
“All the land belongs to the government. The government has the right to clear the land. Take it over, and then to either build stuff on it themselves, sell it to a developer or use it as collateral for loans. They do all three, and they’ve made a killing doing it.”
Stevenson stands in the ravine-like surroundings of a narrow avenue between giant half-finished skyscrapers in Yujiapu. She says the Tianjin government took this land, assessed it at many times its current value, and then used it as collateral for loans. She says Tianjin has borrowed nearly as much as its entire annual GDP to pay for Yujiapu. With China’s economy now in slowdown mode, Stevenson-Yang says the region’s future is bleak.
"Think of it: every single dollar made in Tianjin, one for one, is lent to this particular district which will be written off to no more than a tenth of its value. Where does that money go? It just doesn’t disappear. It becomes everybody’s debt."
She predicts that ten years from now, China’s property bubble will have burst, land will be worth around half of what it is now, and squatters will inhabit Yujiapu’s half-built skyscrapers, like something out of a "Mad Max" movie.
"This is going to be 'Apocolypse Then.' It’s sad. I’ve lived in china for 23 years. I have a huge batch of Chinese in-laws. I like China. I wish things were different. But I don’t see how they can be." In the meantime, China’s Manhattan project marches forward, thanks, in part, to support at the highest levels of government.
An ambitious former Tianjin mayor, Zhang Gaoli, helped secure funding for this district. He now works in Beijing as China's Vice Premier. After hearing Stevenson-Yang’s grisly predictions for Yujiapu, I return to the dapper young developer’s office to ask a few more questions.
Inside, the only sign of life is a receptionist. She’s sleeping at the front desk. A tense-sounding piano tune plays over the PA system, echoing through the marble halls. In front of her desk are framed advertisements for the future city. One proclaims in English: “Concentrate world capital and set China’s ambition.”
Outside, a city is being built. And the receptionist continues to sleep.