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Comment by chrischen | Hacker News Reader

I’m not a big fan of centrally planned cities, but this author has it out for China. The original articles about “China’a ghost town” were also not true. A narrative was invented to sell an interesting story about some failure of China... this article is a non-story, and just an attempt to revive a topic parroted since the last decade.

Many of China’s urban districts were centrally planned and sat empty before they were eventually filled, including the famous Pudong district of Shanghai. https://www.google.com/amp/s/www.forbes.com/sites/wadeshepar...

"If you look around, you will think this is a normal city and just assume this is the way it always was, not knowing that 10 years ago people were calling it a ghost city, 20 years ago it was just apartments and villages." https://www.google.com/amp/amp.abc.net.au/article/9912186

Short story is some developments work, others don’t, but investing in real estate is one way for people to park money so people still end up buying up all the properties.

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Quoting from Caixing Global, a PRC-based financial news source:

China Investment Network, a business newspaper in Beijing, released a "ghost town index" to determine which cities were, well, the most ghostly. The newspaper devised its index using a government standard that says cities should have 10,000 people per square kilometer. The editors at China Investment Network determined that if a city's ratio of people to area was 0.5 – that is, it was half full – then it is a ghost town. To take the example a step further, if a city had a ratio of .10, then it had one-tenth the population the government thought it deserved. Based on this approach, at least 50 Chinese cities fit the description of "ghost town." (1)

This report is from 2014, so maybe some of those cities were eventually filled ... but surely not all of them.

1. https://www.caixinglobal.com/2014-10-17/graphics-ghost-towns...

I think both of these positions (its a fake narrative, and "ghost towns abound") have elements of truth. What it is, is impossible to compare.

Given the structure of western governments, and by that I mean nominally liberal democracies, a policy of funding the development of a city prior to their being any economic reason for the city to exist, is not possible. Western forms of government wait for economic pockets to develop, then tax them, and then with the tax revenue improve them to increase their economic potential. Without a tax base there is no mechanism for funding development.

China on the other hand, has a central government with a fiscal policy of borrowing from the central bank to fund the creation of economic zones prior to there being any economic activity. Once that zone exists, it does not enhance the existing zones nearby thus as they grow there is incentive to move their activity to "nearby" zones which are under utilized. This takes time of course and between the time of construction and mass migration, well the zone is under utilized or a "ghost" town.

When China guesses wrong, and the zone never supports additional economic activity, then its a complete write-off. Something a western government could not survive (they would be booted out of office for it) but one that a central government can (and does) survive.

The bottom line is that it is easy to write stories that amaze people who live in one system by playing on the differences of the other system.

> The bottom line is that it is easy to write stories that amaze people who live in one system by playing on the differences of the other system.

I wonder if they do this in China to things in the USA?

I imagine that if they did, it would be just as skewed and critical as the stories from the west about China are. Even so, it would be interesting to find out what is considered to be "amazing" (for whatever connotations that word has) by the Chinese (or at least their "media") about the United States...

I imagine that there might be one difference - the fact that there are probably more Chinese tourists who visit a wider part of the USA than there are USA tourists visiting the non-touristy areas of China. This might give them a different impression (perhaps closer to reality - whether that reality is objectively/subjectively good or bad to them) than the USA does of China (where we see - or are fed - information about them that still has a smell of "the mysterious" or "the exotic" or "the strangeness").

My gut feels that they likely have a far better, and likely more realistic, impression of the United States than we ourselves do - if only because they can be realistic about it without any threat, where we tell/sell ourselves stories to gloss over the difficult to talk/think about parts.

What pains me most about this, as a citizen of the United States, who has never visited China (but would like to some day) - is that I can see these things; maybe not as clearly as someone not immersed in the culture - but they are still very, very apparent to anyone honest with themselves. Yet, it feels like a large majority of my fellow countrymen either don't, or they do and just ignore it (or take advantage of it); either seems a tragedy to me.

Probably still worse with an authoritarian government manipulating the news. It did not take long after the Huawei arrest scandal for brand new TV channels focused on Canadian news to pop up from nowhere.

The difference being that most Chinese are well aware their news is propaganda.

Fox viewers probably not so much.

They’re aware they’re getting the opinion of the Chinese State, just like Fox News viewers are aware they’re betting the opinion of those who run the Republican Party (and, by proxy, the state)

A building sitting empty for 5 years is a massive cost even if it’s later filled. This goes beyond time value of money and into the limited lifespan of infrastructure. Ghost cities are a problem with an easy and obvious solution, slow down the rate of construction to more closely match population movement.

>> A building sitting empty for 5 years is a massive cost even if it’s later filled.

Don't look too closely at NYC, Vancouver, london, or any of the other hot markets. Whether for historical preservation scams or investment trickery, it is not unusual for a building to sit empty for many years. Given the effort that it takes to oust tenants, and the length of time necessary for zoning/planning, many owners would rather a building sit empty for years pending redevelopment rather than the hassle of filling it.

Google "Calgary new horizons mall". From the owner/developer's perspective that mall is technically full and, at least for them, profitable.

US national vacancy rate is ~6.9% and NYC sit's well below that at under 4%. Much like the unemployment rate these things don't hit 0% for various reasons. But, that's very different from building a 11th building when your first 10 are all at 90% vacancy.

"Vacancy" is something above a building being empty. Vacancy is a building that has space available that hasn't been filled. It does not cover buildings deliberately left empty by owners. A building waiting years to be demolished and replaced isn't vacant, nor a condo kept only as an investment and never lived in.

That mall in Calgary isn't vacant either. Each store/stall is technically occupied by its owner. There just aren't any flesh and blood people in the mall.

NYC has ~60,000 buildings. Less than 1% of them are deliberately left empty by their owners. It’s a very different situation in a city which can make use of that space as demonstrated by the low vacancy rate.

That mall does have people shopping in it. In terms of retail square footage it’s underutilized but a long way from empty. Good or bad investment they are not building 3 of them next to each other while the first is far from full.

Really, you have some edge cases with people trying to time the market, deal with zoning or lawsuits etc. But, that’s different from seeing 6 empty apartment buildings and saying let’s build another one.

For dense urban areas land cost could exceed building cost. However for ghost cities land cost (defined as an opportunity cost) is low to begin with. While building material may have alternative use, if the labor used to build buildings don't have a lot of alternative use then the true economic cost of building a building may be below the headline cost as well.

This build-a-city approach is also probably due to the large rural population in China that have been steadily urbanizing or just moving to the cities for work. So there is some expectance that cities will be filled which does generate false hope and random ghost towns near places of economic activities. Good example in the past is Shenzhen which became big and the other unknown cities built around that time and was grouped with Shenzhen that people have forgotten because they never became big.

https://en.wikipedia.org/wiki/Urbanization_in_China

Not sure that Milton Keynes "Home of the Roundabout" and the other new towns in the UK don't count.

Well, Milton Keynes was built incrementally as people arrived to fill it, and it and the other new towns definitely had an economic reason to exist - the existing towns couldn't handle increasing urbanisation and the growth of businesses that relied on that. It did end up with rather more light industrial space and slightly more offices than necessary due to the decline of British industry, but nothing like the kind of speculative building described here.

I don't think such mass speculative building would even have been economically possible; if I remember rightly, the housing construction was done by the usual home-building companies who needed to be able to sell off their houses to residents in order to afford the next tranche.

It was very centrally planned in what to day would seem very creepy eg segregated housing for workers, supervisors and executives.

By that definition, Chicago, Miami and Philadelphia are "ghost towns" with less than 5,000 people/sqkm

source: https://en.wikipedia.org/wiki/List_of_United_States_cities_b...

The number naturally has to be adjusted when trying to define 'ghost town' in America or anywhere else because relatively few places are built to be as dense as 10k/km^2.

You can find many sources complaining about this in the US, yes. Real estate speculation, etc. People aren't happy about it, so that description is not unreasonable. Some cities are trying to pass laws to address it (not that those laws seem to work).

The density of construction matters a lot here too. Many US cities like the ones you mention were not planned out and are subject to sprawl.

I just googled ghost city china and clicked on a random image which was a cnn article from 2014:

https://www.cnn.com/style/article/china-ordos-ghost-town/ind... https://en.wikipedia.org/wiki/Ordos_City

Apparently it is no longer a ghost town.

Many westerners don’t really understand china’s district system for cities. Ordos City is very old, maybe a couple of thousand years by various names.

Kangbashi is a new remote district (New Town) of Ordos that was built over the last couple of decades and is still very much empty. It is too far away to commute to Ordos’s older more popular districts, and so people don’t want to live there. Many of the apartments have been bought out by speculators, however.

Ordos is kind of the 'original' ghost city, the one that sparked Western curiosity.

There's a lot of reporting about it subsequently.

It looks like folks are indeed moving in, but maybe not at the rate that would make sense.

Ordos was never a ghost city, one of its newly built far out districts, Kangbashi, was. Chinese cities are more like counties that contain multiple municipalities.

Oh look, the propaganda team has arrived!

You don't seem to be refuting the central claim, but rather accusing the person of being non-genuine, can you point out any flaws with their assertion?

Created an hour go not ring any bells

There's nothing to refute, they posted an article that contradicts their own assertion.

Wow, 10,000 per km² sounds crazy ambitious. By those standards, Germany is a ghost land, cities here barely reach those numbers in the densely populated parts, certainly not on average.

Keep in mind they are built out for that density, having comparably much less density (much closer to a German small town) before development.

Berlin has 3,944 inhabitants per km2. If not even that city reaches the standard, I think the criteria must be flawed. My city is the third largest in Mexico and it has less than 3500/km2.

Or maybe we need an article about ghost countries.

I guess the standards necessarily are different for a city of skyscrapers

Pudong was definitely in that range before it was developed. Chinese densities are completely different from the rest of the word. No one calls a 3500/km2 area a ghost city of it is built for 3500/km2, but if it’s built for 10k/km2 with lots of 30 story apartment blocks, there are a lot of empty units and you can play football in the overbuilt 8 lane streets.

Berlin has forests within its borders.

So does Mumbai (the Sanjay Gandhi National Park) and it still supports a density of 73,000 people/sq km.

What? Wikipedia has Mumbai at just 21k/sqkm, and even that seems to be megacity (urban) density, not its metro density, which is only 4,700/sqkm. I assume the national park is in the latter and not the former.

https://en.wikipedia.org/wiki/Mumbai

https://en.m.wikipedia.org/wiki/Mumbai_Metropolitan_Region

> Wow, 10,000 per km² sounds crazy ambitious. By those standards, Germany is a ghost land, cities here barely reach those numbers in the densely populated parts, certainly not on average.

Yeah, but to get those levels, they fill blocks with dozens of identical 25 story apartment buildings. E.g.: https://pulitzercenter.org/sites/default/files/styles/node_i...

They are usually 32 stories high since that is how far they can go with concrete.

That isn't inherent to getting the density though. You could design them all differently if you wanted.

You could find an example of a row of identical buildings in any country, it doesn't prove anything.

It isn't inherent, but it sure is attention grabbing. In my experience, cookie-cutter construction is far more common, at a far larger scale, and far more obvious in China than in any other country I've visited.

By Chinese standards, most places are barely populated. They are a fifth of the world.

>Short story is some developments work, others don’t

This is the key point because the goal of these (over)-ambitious projects never was 100% allocation efficiency. It's much more comparable to the era of America's railroad tycoons than it is to economic development as we're accustomed to.

There's a relatively huge degree of waste, corruption and whatnot, but the goal isn't efficiency, it's effectiveness. Through these projects, even if a portion is ill-conceived, China is able to rapidly urbanise, avoid many of the pitfalls in regions with more incremental approaches, and also builds construction and planning knowledge (this one is very important) and finds a pathway for its export surplus.

It's the same approach China has taken to its tech industry. Is a lot of funding going to bogus projects? Yes, but they can afford it, and even if only a fraction pay off they'll consider it a win. Is it slightly mad to treat building a city like a VC investment? Sure, but then building company towns and new settlements and railroads seemingly randomly through a country was as well. And yet, when it works and it creates one new hub of innovation, it pays a hundred times over.

Actually, most of those ghost towns were real, and many are still basically ghost towns (eg Ordos new town district, which might come back when coal is great again; and then we have Tianjin’s financial district, but derelict buildings is nothing new for tianjin).

Speculating on property is a horrible way to go about development. Building a new district in a second or third tier that is then speculatively bought out by rich city investors with the idea that there are lot of millionaire farmers who will relocate there later is just plain idiotic.

While very true, I don't think this criticism is really the important point.

The rapid pace of Chinese urbanisation and economic advance from such a low base has meant China's development has been necessarily highly speculative. There have been huge wins on projects that in the west would look absurd, as well as huge losses.

What you also have to remember is that the state has a huge interest to keep construction happening as its one of the biggest employing industries.

However development is trending now overall towards a more mature western approach. Big developers are more experienced. Unmet demand it not as massive as before. And wages are rising. The ridiculous projects are reducing in pace and being more carefully organised.

Oh, we all are aware that construction is a huge jobs program, and that most of these buildings are going to be torn down after 20-30 years of use, since Chinese construction using concrete and cheap labor necessarily requires overbuilding that makes proper maintenance very expensive. Local governments see this as a feature, since every new building is more GDP, even demolition of the previous building is added GDP they can report to central.

A lot of the speculation will have to fall off. A good old fashioned property bust would do wonders to correct all the distortions in the market, but the central government keeps doubling down on more.

Call me a wowser but I far prefer a country whose big government employment program is building housing and not building armies that are ten times the size of all the largest other armies combined.

That's a nation with a very big unused hammer adventuring around the world looking for a nail.

I never said it was “wrong,” just that there were consequences to this kind of thinking. So if you build something that is empty for 15 years, it was useless for half its lifetime, and that is if it was even being maintained while basically derelict; it is highly likely that when the building is actually needed, they will tear it down and start over again.

China will eventually move to a high skilled labor force and these problems will go away. But that is not today.

I think you can fairly report on a ghost town and call it a ghost town if it is one at the time.... even if it fills later.

And I think you can question later such places later and their debt ... and not "has it out for China".

An article someone doesn't like doesn't mean they "has it out for China".

The original articles about “China’a ghost town” were also not true.

I've seen news reports on NHK showing Chinese ghost cities. One was a very long (maybe an hour) documentary that also included the ghost villages happening because people are being forced to move to the cities.

Yeah, I watch a few YouTube channels of Americans in China and the ghost towns are still everywhere. Their buildings in general also seems to be of extremely poor quality, but it's one of those topics that's socially unacceptable to discuss.

Here's a recent example: https://youtu.be/XopSDJq6w8E

> but it's one of those topics that's socially unacceptable to discuss.

What? What's the definition for "socially unacceptable" here? I have always seen news articles discussing the poor build quality in China, here are some examples [0][1].

Here's a discussion on Zhihu (Quora copycat) on house build quality too [2].

[0]: https://cj.sina.com.cn/article/detail/2381596945/79395?cid=6...

[1]: https://house.ifeng.com/column/news/jianzhushouming/index.sh...

[2]: https://www.zhihu.com/question/19641156

Wow, you found some discussions on the internet where anyone can find discussions about literally anything. I'm convinced!

> they were eventually filled

Which may or may not be true, but what you really want to know is what is the total value of property there vs. the total value of loans issued against it.

If they were only able to fill it by exploiting favorable central bank policies, all they've done is kick the can down the road.

> Many of China’s urban districts were centrally planned and sat empty before they were eventually filled, including the famous Pudong district of Shanghai.

I think it's kind of funny to call pudong an "urban district". It is one, but it feels much more suburban than puxi. It has the skyscrapers, but it's characterized by wider roads, sparser buildings, and much more view of the sky. I think of "urban" as connoting denser buildings.

I've seen some of the massive empty developments myself. Not the city written about here.

Honestly, I think most American media has it out for China. Which results in the people having it out for China. Which results in like Redditors spamming Tiananmen Square on any thread involving China or even things like Epic Games who merely has investment from China.

> I’m not a big fan of centrally planned cities, but this author has it out for China. The original articles about “China’a ghost town” were also not true.

I'm sorry, but this isn't true, and I say this from my own experience repeatedly visiting Dalian over the past seven years. My last trip was 2016.

Dalian's government is heavily promoting the East Harbor district. They've built a lot of skycrapers, a newly built "financial convention center"[0], a Vegas-style musical water fountain, and oddly enough, a small area modeled after old Venetian neighborhood[1] complete with canals and gondolas.

I've visited the East Harbor twice in three years. It's empty. The street lights barely work. The skycrapers are dark or unfinished. The Venetian neighborhood is is blocks of completely empty buildings. Most of these storefronts were clearly never rented, as evidenced by their completely unfinished interiors. Of the ones that were rented, there's closed coffee shop (signs are still in the window), and a closed restaurant. What does exist in this maybe square kilometer or 2 is (and I believe this list is complete), a "western style" international kindergarten / preschool, and a wedding photography studio, and a stand to rent a gondola ride. That's it. You will find as many couples getting their wedding photos taken in this neighborhood as you will tourists. (It's very photogenic neighborhood, especially at night.)

Other parts of the city also have empty apartment buildings, but I want to focus on the East Harbor, because it's a good microcosm of the ghost town phenomena.

At the end of the article, the chief executive the Tianjin Juilliard School is quoted as saying something rather insightful. “I think they are looking at this as a feather in the cap of this new project.” I think he's right. There's a very strong political component to the promotion and construction of these districts. It's a lot like shipping dubious feature all in the quest for showing "impact" at a FAANG.

Dalian's East Harbor is recently reclaimed land, and is being actively promoted (Including by the army showing up and evicting businesses in the middle of the day.[2]), as an alternative to already built and successful Xinghai Square[3] district. Xinghai Square had a fountain, but then it was ordered destroyed, to promote East Harbor. The huabiao in the center of the square, was demolished in the middle of the night. Streetlights are being turned off at night. The neighborhood is being actively sabotaged in an effort to migrate the population to the empty East Harbor district. Why would this happen? Well, the Xinghai was developed by former mayor and Xi Jingping rival, Bo Xilai. (Bo Xilai is now in jail on corruption charges.) The conventional wisdom is that East Harbor's promotion and the destruction of Xinghai is serving two purposes. It shows political fielty by carrying out a damnatio memoriae on a political rival of the new president for life, while also demonstrating the new mayor's economic "impact".

This is what's going on across the country. It's as obvious. It's as obvious as 10 city blocks of empty 50 story buildings.

[0] http://en.yifang.cn/2017/group_new_0224/72.html

[1] http://www.yunnanadventure.com/show/Dalian-builds-%22Orienta...

[2] Yeah, that happened at a rather nice indoor swimming pool / fitness center my in-laws frequented, while they were there.

[3] https://en.wikipedia.org/wiki/Xinghai_Square

I visited the city last year, out of curiosity.

Binhai is far from being exceptional from other abandoned "new areas." Even in 20m people Shenzhen, a lot of new skyscrapers are empty.

A girl I tried to date last year was running a chemical company in Ningbo's "new area." I went there too. It blew my mind that her company was occupying a whole floor in a 30 storey building, and was one of only two tenants. And that was only after the local government gave them a $3m endorsement.

The girl latter tearfully admitted to misspelling her age in Tinder by a whopping 3 years, and I moved on :)

What the article underlines well, and say what other don't is that there is a positive feedback loop:

1. Banks are given political directives to dish out loans to all those "new areas"

2. Developers than rent extremely overpriced land from municipalities, and build similarly overpriced highrises/elite hotels/luxury malls

3. A great lot of that real estate is then unloaded, and leased away to no-name municipality's own asset management companies at laughably low rate.

4. Whatever money that was not banged away immediately, ends up in same banks after a few years.

5. On the paper, the value of those skyscrapers goes up!

6. Read Marx and profit...

In essence, the state cashed out a substantial portion of the People Bank of China without anybody noticing as sum on their balance sheet was seemingly not influenced.

The problem of China 20 years ago - a lot of underused rural land

The problem of China now - a lot of underused prime rib real estate

>The girl latter tearfully admitted to misspelling her age in Tinder by a whopping 3 years, and I moved on :)

What a weird thing to include...

We have a plant/office in Ningbo. It's 5 stories, however only the first floor is used. There is a server room on the second floor. Very odd.

> The original articles about “China’a ghost town” were also not true.

They're 100% true and many of them are still ghost towns, unless you listen to the Chinese government (which is desperately trying to convince you otherwise).

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