Dateline-China's Ghost Cities

[Docfeelgood]

http://www.sbs.com.au/dateline/story...s-Ghost-Cities

GILLEM TULLOCH "It is said that there are 64 million empty apartments in China. "

One remarkable piece of economic news barely rated a mention this week, China surpassed the United States as the world's leading manufacturer. It is hard to grasp the magnitude and speed of China's economic transformation, however, things may not be as rosy as they seem. It's estimated that ten new cities are being built every year - a sign of future growth or just another bubble waiting to burst? Adrian Brown reports.

interesting

[DaShi]

They were the last 3 times it was posted.

[Docfeelgood]

this has been posted before?

[Docfeelgood]

20th March 2011

[DaShi]

Never forget!

[Al B. Sure!]

Is it cause of bird flu? Or because of radiation coming from Japan?

[Dinner]

That issue was interesting 2009 when it was new.

http://www.dailymail.co.uk/news/worldnews/article-1223747/Ghost-mall-The-worlds-largest-loneliest-shopping-centre.html

[Docfeelgood]

Is it cause of bird flu? Or because of radiation coming from Japan?

I see you did not look at the link or read the quote

[Dr Strangelove]

Is it cause of bird flu? Or because of radiation coming from Japan?

It's because China is building vast numbers of upscale apartments without having commiserate numbers of upscale people to fill them, and to make matters worse it's building so many of them in places where ther is no population to fill them. Chima's building new megapolises that lack an underlying economic base, so few people are moving to the new cities.

Are all of these projects funded by the government? What would happen if the government slashed prices?

[C0ckney]

it's funny because i saw an article today which paints a very different picture of urban china...

[N35t0r]

I'd hazard that 'urban china' is as much a homogeneous entity as 'urban europe'...

[Dr Strangelove]

It should also be pointed oput that it's not unusual for filling major building projects to take a lot of time. IIRC it took over a decade to fill the Empire State Building and large portions of the World Trade Center were vacant for years. It took decades for the city of Brasilas to fill up. That new city in China that's supposed to house 12 million is 1/4 occupied - that means that 3 million people have moved in. That's nothing to sneeze at.

[Dinner]

It's because China is building vast numbers of upscale apartments without having commiserate numbers of upscale people to fill them, and to make matters worse it's building so many of them in places where ther is no population to fill them. Chima's building new megapolises that lack an underlying economic base, so few people are moving to the new cities.

Are all of these projects funded by the government? What would happen if the government slashed prices?

I believe state owned banks (both at the national level and the provincial level) are funneling money into these projects in order to meet the CCP's dictate about high economic growth. Most of the owners, who got loans from the state, are either owned by politically connected people with party connections or by provincial owned development companies. The reality is China really, really needs more modern housing but most Chinese still can't afford modern housing especially since China requires 50% down payments and the remaining 50% to be paid off in just five years. With those kinds of terms its no wonder most people can't afford a mortgage but if they moved to a western style 30 year loan then I suspect you'd find hundreds of millions of new buyers.

[Dr Strangelove]

Yes they need to liberalize their terms of sales, but if the average urban family is making $6000 / year they're still not going to be able to afford $ 500,000 apartments. A 10% down payment would be 9 years of wages and the average balance paid off each year would be 2 1/2 times their annual earnings. That's not counting the interest paid. To bring housing into the range of their workers they'll need to bring the prices down to around $20,000.
I wonder what the actual unit cost of these apartments is?

[Jon Miller]

reminds me of dwarf fortress

JM