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For the past three decades, China’s growth model has been anchored in building big projects: highways, bullet trains, and real estate. And that’s left hundreds of cities across China, nearly empty – ill-conceived projects built for the sole purpose of boosting GDP growth.
An empty shopping mall in the ghost city of Ordos, China.
As part of Marketplace’s stage performance in the beltway “How I learned to stop worrying and love the numbers,” China Correspondent Rob Schmitz will take audience members on a tour of China’s ghost towns, ghost malls, and ghost suburbs, delving into the numbers that explain how a land of 1.4 billion people can have so much empty real estate.
A glimpse into China’s most-famed “ghost cities”
China has laid out an ambitious plan to transform 250 million people from the countryside into city dwellers in the next 20 years. Its push for urbanization has encouraged local governments and developers to build skyscrapers and residential complexes, many under the belief of “build it and they will come”. However, the construction spree has left soaring debt, creating insolvency risks for local governments and inflating the country’s real estate bubble. By China’s official account, China’s local governments owed $ 1.8 trillion of debt by the end of June 2013, about a third of China’s GDP. A CLSA report says China is “addicted to debt”.
We’ll take listeners to a Chinese replica of Manhattan, a city that was built to replace New York City as the world’s financial capital, but is now one of the world’s largest abandoned construction sites. He’ll bring listeners on a journey to one of China’s largest ghost cities, a metropolis built for a population the size of Pittsburgh’s, but that is now largely empty, a place where squatters have begun to occupy empty offices and where the government is in so much debt that it’s turned to developers to bail it out.
The city of Yujiapu is being built to become the world’s largest financial capital. Construction on the city, a replica of Manhattan, has been recently halted due to a lack of investor confidence.
It’s a side of China you rarely hear about, but it’s an incredibly important phenomenon to understand to grasp the totality of the economic changes China’s embarking on as it attempts to rebalance its economy.
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