China’s most famous ghost city, Ordos in inner-Mongolia, has regularly been cited as a prime example of China’s unsustainable construction-led economy.
In 2009, AlJazeera posted an explosive video showcasing Ordos’ ghost apartments and frenetic pace of construction, which exemplified the “build it and they will come” approach that has underpinned the Chinese economy. AlJazeera provided a follow-up in 2011, which was equally revealing.
Then Business Insider posted a slideshow of China’s empty cities, headlined by Ordos.
And in late 2011, a video from NTD Television showed how Ordos’ home prices were crashing, having fallen by almost one-third. Meanwhile, construction had finally ground to a halt, leaving many construction workers unemployed.
Then last year, a video from the Atlantic followed a group of skaters through Ordos, showing a city that appeared almost completely empty three years after Aljazeera’s first ground-breaking report.
And who can forget 60 Minutes’ explosive video earlier this year showcasing China’s ghost cities, with Ordos front-and-centre.
These kind of malinvestments – projects that cost billions of dollars but provide but little economic return – have the potential to become a millstone for China’s banks and economy going forward, subtracting from its growth potential.
With the real estate market accounting for around 10% of China’s GDP growth, and affecting many related industries, there also remains the concern that construction and sales could ultimately grind to a halt, crimping local government land sale receipts and dragging China into a sharp recession.
Well, there are always two sides to every story, and a new documentary (trailer below) attempts to provide balance to the view that Ordos is a disaster in waiting, instead portraying a city signs of life and a hopeful and optimistic population. From the Atlantic:
When we first went there two years ago, the new city was actually quite empty. When you go there now, it is a lot livelier. It’s a mix of people: people who have been relocated from the greater Ordos region, people who have moved there from the old town — for whatever reason — and other people that are there who moved there in search of new economic opportunities, whether it’s migrant workers in the construction industry, or families from Beijing looking to live in a place with more space and less air pollution…
The thing that has amazed me about Ordos is how optimistic people are there, and how hopeful they are. In the end, that’s the sense that we get — that despite challenges, people still really believe in this place, whether they have been relocated there by the government, whether they work for the government, or whether they have traveled there from another place to pursue new opportunities.
So while home buyers and investors in Ordos might have lost a ton of money, at least it doesn’t appear to have been a complete waste.
