Reuters — The myth of China’s ghost cities

There is hardly a single new urban development in the country that has yet gone over its estimated time line for completion and vitalization, so any ghost city labeling at this point is premature: Most are still works in progress. But while building the core areas of new cities is something that China does with incredible haste, actually populating them is a lengthy endeavor.

When large numbers of people move into a new area, they need to be provided for; they need public services like healthcare and education. Therefore, a population carries a price tag and there is often an extended period of time between when cities appear completed and when they are actually prepared to sustain a full-scale population. This could be called the “ghost city” phase.

Most large new urban developments in China eventually move through this phase and become vitalized with businesses and a population. Essential infrastructure gets built, shopping malls open, and places where residents can work are created. In many of the biggest new cities, new university campuses will emerge and government offices and the headquarters of banks and state owned enterprises will be shipped in, essentially seeding these fresh outposts of progress with thousands of new consumers. From here, more businesses are attracted — often drawn by favorable subsidies like free rent — and more people trickle in as the city comes to life.

Some of China’s most notorious ghost cities saw phenomenal population growth in recent years, according to a report by Standard Chartered. In just a two year period from 2012 to 2014, Zhengdong New District’s occupancy rate rose doubled, while Dantu’s quadrupled and Changzhou’s Wujin district increased to 50 percent from 20 percent. Though there is still an excess of vacancies in these places, when urban areas of high-density housing are even half full there’s still a large number of people living there — more than enough for the place to socially and economically function as a city.

It generally takes at least a decade for China’s new urban developments to start breaking the inertia of stagnation. But once they do, they tend to keep growing, eventually blending in with the broader urban landscape and losing their “ghost city” label.…

Reuters – April 22, 2015
The myth of China’s ghost cities
Wade Shepard