rom desolate copies of western towns to a village with a skyscraper taller than the Shard – the story of cities without people in the world’s most populated country
The first thing to understand is that nobody in China actually owns property. Land is still nationalised, and leases are sold for up to as many as 70 years. That China lacks property, however, doesn’t signify a shortage of property developers. In fact, the “property” market described here sounds as extreme, if not more so, than that of London, with extortionate rents, a paucity of social housing (a pitiful 3% of all construction) and, most of all, the use of apartments and houses as investments – it is normal for middleclass Chinese to borrow their way into owning several unoccupied flats, even if they don’t have one to live in. A version of this practice is now familiar in the UK; who influenced who is an open question.
The second important point is that a “city” in China is not simply an urban built-up area. Rather, it is a legal designation referring to everything that the municipality controls. So a “city” such as Chongqing encompasses 28 million people, of whom only around 4.5 million actually live in the recognisable city itself. Urbanisation is much more lucrative than conserving agricultural land, so the municipalities – perpetually starved of central government funds, as in the UK or US – are eager to build.
Reversing Mao, the result is that “the city surrounds the country”. Premier Li Keqiang has stated his intention to “avoid the typical urban malady where skyscrapers coexist with shanty towns”, but something like this is occurring, as the encircled villages become home to the migrant workers whose labour underpins all this feverish construction. Meanwhile, the rural evictions that turn a “city” into an actual city are often bitterly resisted. One insurgent village was given the almost unprecedented right to freely elect its own council, which quickly realised it would have to flog land to fund its policies – a cruel initiation into the problems of reformist local government.
Once built, the newly urbanised area often stays depopulated for a few years, as it is more expensive for investors to properly fit out and let their flats, so they sit on them until – as inevitably happens – the Communist party induces businesses to move to the area, usually by opening a new branch of a university and extending a metro out to each “ghost city”; benefits, such as free transport, low rents or even a couple of years rent-free are offered and are usually effective.
So few places remain ghost cities for long. And if they exemplify a problem, it is rising inequality, rather than a precarious economy. The property bubble is unlikely to burst, as local authorities are merely one (municipal) branch of the Communist party owing money to another (banking) branch, which has no interest in making its comrades bankrupt. Milton Friedman, Shepard notes, saw Pudong, Shanghai’s Central Business District, in its early form as a ghost city, or rather a “statist monument to a dead pharaoh”. It is now one of the most bustling, populated places on Earth.