Are There Really Ghost Cities in China?

Throughout history, ghost towns tend to start as boomtowns, and contemporary China has more boomtowns than any other country in history. No economy has ever rose so rapidly and no place has ever built so much so quickly. This rapid growth has resulted in peculiar side effect: ghost cities, everywhere.

Although when discussing China’s empty new cities and districts the term “ghost town” is technically a misnomer. A ghost town is a place that has become economically defunct, a location whose population and businesses base dropped to ineffectually numbers. In other words, a place that has died. What China has is the opposite of ghost towns. It has new cities that have yet to come to life; scantly populated places that are the product of an economic boom rather than the result of an economic demise.

There are nearly 600 more cities in China now than there were when the Communist Party took over in 1949. This large scale urban transition began in the early 1980s following the conclusion of the sixth five year plan, which provided an outline for development that’s still consulted to this day. Rural areas began being rezoned as urban en masse, authority over prefectures began being handed over to municipal governments, and the city took center stage in China’s plans for the future. In the early 2000s this urbanization movement was kicked into high gear. New urban developments began popping up seemingly everywhere — along the outskirts of existing cities as well as in the previously undeveloped expanses between them. Many cities doubled or even tripled their size within relatively short spans of time. In just 15 years Shanghai alone grew sevenfold and its population increased from 6.61 to over 23 million.

Although China’s broader urbanization movement shouldn’t be thought of as a developmental free for all that lacks a master plan or direction. There is a method behind all of this building and an overarching framework that holds it all together. 10 massive new urban conglomerations called mega-regions have been proposed in strategic locations across the country. These are essentially city clusters of 22 to over 100 million people each that are to be connected together infrastructurally, economically, and, potentially, even politically.

China’s fiscal policy all but requires local municipalities to comply with this broader urbanization plan. According to the World Bank, local municipalities in China must fend for 80 percent of their expenses while only receiving 40 percent of the country’s tax revenue. Land sales make up much of the difference, providing up to 40% of a municipal government’s revenue. This need for fast cash has resulted in a buy low, sell high scheme, as municipalities buy up cheap rural land, re-designate it as urban, and then resell it at the high urban construction land rate — pocketing the difference. According to China’s Ministry of Finance, land sales raised US$438 billion for China’s local governments in 2012 alone.

When developers purchase these new plots of land they are prohibited by law from sitting on them. They must build something. While it is commonly thought that getting in on a new development zone early is key to making a big profit, these areas tend to lie far outside the bounds of mature, built-up urban areas, so doing this often means constructing vast apartment complexes, giant malls, and commercial streets in places that do not yet have much of a population base to support them.

Building a new city from the ground up is obviously a long term initiative, and the projected amount of time that China estimates for this is roughly 17 to 23 years. Ordos Kangbashi plans to have 300k people by 2020; by 2020 Nanhui expects to attract 800k residents; the population of the Sino-Singapore Tianjin Ecocity is predicted to top 350k by 2023; five million people are slated to live in Zhengdong New District by 2020, etc . . . China’s new cities are just that: new. 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 technically premature: most are still works in progress.

Where building the core areas of new cities is something that China does with incredible haste, actually populating them is more of a lengthy endeavor. When large amounts of people move into a new area they need to be provided for; they need public services like health care and education. Therefore, a population carries a price tag, especially when we consider that these institutions also need to be built up from scratch. So 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, which could be called the “ghost city” phase.

Though most large new urban developments in China eventually move through this phase and become vitalized with businesses and a population. Essential infrastructure, like highways, metro links, and train stations are built, shopping malls are opened, and places where residents can work are created. In many of the biggest new cities new university campuses will be built 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 who act as a catalyst for the local economy. From here, the ball gets rolling, more businesses are attracted — often drawn by favorable subsidies like free rent — and more people trickle in as the city comes to life.

According to a report by Standard Chartered bank, some of China’s most notorious ghost cities saw phenomenal population growth in recent years. In just a two year period from 2012 to 2014, Zhengdong New District’s occupancy rate rose from 30% to 60%, while Dantu’s grew from 10% to 40% and Changzhou’s Wujin district increased from 20% to 50%. Though there is still an excess of vacancies in these places, when urban areas of high-density housing are half full there’s still a large amount of people living there — more than enough for the place to socially and economically function as an actual city.

It generally takes between 10 to 15 years for China’s new urban developments to start breaking the inertia of stagnation, and once they do they tend to keep growing, eventually blending in with the broader urban landscape and losing their “ghost city” label in the process.

A version of this article was originally published on Reuters at The Myth of China’s Ghost Cities.

The book, Ghost Cities of China, can be purchased at Amazon or directly from the publisher, Zed Books.