China’s ghost city busts

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.

Last year, 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.

Then Business Insider posted a slideshow of China’s empty cities, headlined by Ordos.

Now a video from NTD Television shows that Ordos’ home prices are crashing, having fallen by almost one-third. Meanwhile, construction has finally ground to a halt, leaving many construction workers unemployed.

With the real estate market accounting for around 10% of China’s GDP growth, and affecting many related industries, the concern is that the property downturn might become widespread, dragging China into a sharp recession.

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Unconventional Economist

Comments

  1. “the concern is that the property downturn might become widespread, dragging China into a sharp recession.

    And you forgot to add at the end of it.

    dragging China into a sharp recession and Australia too

  2. It is just one city. It doesn’t mean house prices will fall sharply elsewhere. We have to wait for the next overall house price data to gauge how much the fall is accelerating. It will probably be bad, but yeah, nowhere near this bad.

    • “It is just one city. It doesn’t mean house prices will fall sharply elsewhere.” True but remember China govt is good at hiding things. There a lot more cities like this one that are in the middle of nowhere and empty. I am sure its having the same effect and the Chinese are covering it up to keep social unrest in place. It started in a few places in the US and then hit everything else. This is just the beginning of worse to come in my view.

    • Yes it will get worse, much worse. I’m not sure if the government is hiding the extent of it in the stats though the meager price falls in the last 2-3 months suggest that there may be some fiddling going on.

      I’m no longer sure who to blame for this fallout when it hits Australia. Are the people to blame for believing that China can just boom forever? The media for intentionally lying and attracting noob economists that agree. The Government for going all in on China?

  3. Which would explain why the Convention Centre we designed for Ordos is not looking likely to go ahead. :-/