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Koos Jansen

Koos Jansen

Koos Jansen is a precious metal analyst from the Netherlands. Koos
mainly provides unique insights about Chinese gold market.

Guest Post: Are The Chinese Ghost Cities Really Empty?

  • Date
  • Author Koos Jansen

“China is the most talked about, but the least understood", was recently being said on CNBC. I fully agree – from what I know of the Chinese gold market.

Western reporting on China swings from the most powerful economy after the US, that will soon take pole position, to the biggest financial bubble on the face of the earth that will soon implode. One of the most important elements of the Chinese economy that’s being discussed is their real estate market (the Chinese ghost cities). We’ve all seen video’s and pictures of vast cities being inhabited by not one living soul, perhaps not the best allocation of resources in any economy. But are these cities really empty? Or are they not, and are Western media portraying the Chinese real estate market as a bubble simply because that is part of contemporary financial warfare? Or are Western media suffering from the growing burden the debt based monetary system is inflicting on all labour; less time for more output, which makes investigative journalism close to impossible.

I present an article that takes on a completely different angle regarding the Chinese ghost cities than many other reports I’d read about them. In my opinion you can only make a fair judgement about anything if you have considered all angles. After reading this my views of the Chinese real estate market had certainly changed.

Written by Wade Shepard, the author of Ghost Cities of China, coming soon from @ZedBooks. Follow him on Twitter @wadeshepard. His website is VagabondJourney.

A Journey To China’s Largest Ghost City

March 29, 2013

“We discovered that the most populated country on earth is building houses, districts, and cities with no one in them,” began a report on 60 Minutes which aired on March 3rd. The news program’s timeless correspondent, Lesley Stahl, ventured out to the city of Zhengzhou accompanied by the Hong Kong based financial adviser, Gillem Tulloch, and got the low down on China’s ghost city phenomenon.

Finally, I thought, I will see a proper ghost city.

I’d been chasing reports of deserted cities around China since last December, and I had yet to find one. Over and over again I would read articles in the international media which claim that China is building cities that are never inhabited only to find something very different upon arrival. The New South China Mall had a lot of empty shops but it turned out to be a thriving entertainment center, Dantu showed that an initially stagnant new city can become populated and come alive, and I found that Xinyang’s new district, a place called a ghost city since 2010, wasn’t even close to being built yet. The 60 Minutes report served as portent that there are really ghost cities out here in China. Or so it appeared.

Watch the 60 Minutes report:

Now watch my report:

I ventured to Zhengzhou right after 60 Minutes filmed in its Zhengdong New District. Stahl claimed that she found this area deserted:

We found what they call a ghost city of new towers with no residents, desolate condos, and vacant subdivisions uninhabited for miles, and miles, and miles.

As she narrated, video footage showed scenes of tightly packed high-rises sticking up out of the landscape like a bed of nails stretching far off into the horizon.

“They’re building cities, giant cities are being built with people not coming to live here,” she continued.

Zhengdong New District financial center

Zhengzhou is the capital of Henan province and has a rapidly growing population that’s topped eight million. Over the past decade, construction crews have been building a new district in its northeastern suburbs. The rationale here is simple: it is easier and more effective to build a new city than it is to completely tear down and then rebuild an existing one. This is an urban planning strategy that many big cities in China are in the active process of conducting to varying degrees.

The layouts of many older cities of China cannot easily be made to fill the demands of the modern era. Rather than fighting long, losing battles against transportation, urban migration, and sanitation, the Chinese are just starting over and building new cities from scratch. The old city of Zhengzhou is currently packed bumper to bumper with automobiles — its curvy, narrow, organically created streets are a warzone of traffic. The city is a scrambled mess that has been brought to a breaking point by a population that’s overgrown its bounds and consumes more resources than ever — so a pressure valve has been released in its northeastern quadrant, and the Zhengdong New District was created.

Many of China’s new urban districts are not being built for new migrants coming into cities, but for people looking to escape the congestion and insanity of the old cities. So, generally speaking, many of these new cities are being created to accommodate the country’s rising wealthy and middle classes — who tend to drive personal automobiles, leave large resource consumption footprints, and, simply speaking, want more space and things.

So the eastern suburbs of Zhengzhou were transformed into a rolling sea of brand new high-rises, soaring skyscrapers, elevated highways, museums, exhibition centers, and shopping malls. This new district currently covers 115 square kilometers, roughly the size of San Francisco, and there are plans to nearly quadruple it. Zhengdong was designed to hold two million people and act as the city’s upper/ middle class epicenter — a new city for the rich.

Likewise, no amount of monumentality was spared in the building of this zone. China’s new cities are often made to be recognized, they are built to be epic. The landscape in Zhengdong is littered with post-modern landmarks, oddly shaped buildings, and a kaleidoscopic offering of differing and contrasting architectural styles — the inevitable result of Chinese engineers and architects being given a completely blank urban canvas to paint a new city upon. So Zhengdong has a museum that looks like a clutch of golden Easter eggs, an exhibition center shaped like a paper fan, a chubby skyscraper that seems to have been modeled off of an overfed leech, and a dozen or so flamboyant, built-to-be-recognized towers.

Map of Zhengdong CBD

At the heart of this freshly minted urban colossus is the Zhengdong CBD, a financial district that was created to be world class. It was designed by Kisho Kurokawa, and has more akin to something a mad architect would see in a dream than actually build in real life. It is laid out on a circular plan, and has two concentric ring roads which make the area look like a giant archery target from above. These two rings are lined with corporate towers, luxury high-rises, and shopping malls, while the bull’s eye is made up of a manmade lake and a park.

The area that 60 Minutes shot in surely looked “ghost-like” on film, but when I arrived there I found an entirely different scene. I found a sparkling new financial district that was full of sparkling new cars, well-dressed pedestrians, corporate offices of major businesses, skyscrapers full of occupied offices, expensive coffee houses, laundry hanging in the windows of luxury condos, there were cars parked in nearly every available parking space, and signs of life everywhere. There was nothing desolate about the Zhengdong CBD, it appears to be functioning as planned.

I located the landmarks that have continuously been used to proclaimed this place a “ghost city,” but I could not snap a photo or take a video which replicated the desolate scenes that have been broadcast around the world. There were just too many people, too many cars, too many businesses, and my shots kept getting buggered by the life that’s sprouting everywhere here. Whereas other media sources are consistently able to get videos that show a ghost city, I was only able to get shots that showed a living and breathing new district.

Zhengzhou museum

I walked into the Novotel tower and took an elevator up to the top floor. I wanted to capture the same shot that the 60 Minutes crew made famous a few weeks ago. There are two towers that stand side by side in Zhengdong that have flower petal-like facades emerging from their roofs. 60 Minutes got a shot of one of them by going up in the other. So that’s what I did. Before getting in the elevator I read the directory of business that had offices in the tower, and I could not help but to note that every floor was occupied.

On the top floor I walked into an office and asked permission to take photos out their window. The two women behind the desk nodded and I took a video of the northwestern side of the Zhengdong district. But I could not get the view I wanted of the tower’s flower topped twin, so I descended one floor and made for an office on the opposite side.

Novotel tower

I walked though an open door into an large office that was full cubicles and people at work in front of computers. Nobody stopped me as I made for the windows that would provide access to the scene I wanted to capture. There was a row of private offices in my way, so I walked into one and asked the guy sitting behind the desk if I could take a photo. He obliged with a “why not” shrug and showed a moderate amount of amusement at my intrusion. The windows this far up were filthy, and another worker quickly jumped to my aid and opened one of them for me. I got what I was after.

Did 60 Minutes actually go into a skyscraper that was full of businesses, walk into an office full of workers, film a district full of life out of the windows, and then claim that it was all deserted?

View of Zhengdong CBD from the Novetel tower

I then walked a short way to the abandoned mall that 60 Minutes filmed in a few weeks before. It is called the Orient Center, and is the place that Stahl claimed to be ” . . all make believe. Non existent supply for non-existent demand.” I stepped through the doors and strode by the security guards as though I had some place to go. But just as I rose my camera to take a shot of the fake Starbucks and Nike signs which were optimistically hung above vacant retail spaces, a voice called out from behind me.

“Hey man! Where are you going?”

“For a walk,” I replied. A twenty-something guy in a business suit appeared from behind me, and it seemed as if I had been caught. His English wasn’t very good but he was trying to use it anyway, so I kept my Mandarin in check and strung him on with a babble of my native tongue as I continued walking. He chose to follow at my heels and struggle over my gibberish rather than simply boot me out the mall.

“Walk with me,” I requested. He obliged. I now had a guide — free of charge.

Fake KFC sign that 60 Minutes filmed

We walked together into belly of the empty mall. Fake signs for Western stores lined both sides of the hallway to demonstrate what this place could look like if it actually had any stores. KFC, Starbucks, Zara, Adidas, Nike were all represented.

“When was this mall built?” I asked my new found wing man.

“Three years ago,” he responded.

“Has there ever been any stores here?”

He answered that the place has always been barren of business.

Soon we came to the end of the “show mall.” We crossed the divide between the make believe and entered into the real. It was truly desolate. The walls no longer had white paneling over them and the floor was no longer tiled. Everything was stripped bare, to the raw. We were enveloped in a grey skeleton of concrete. Apparently, the developers hadn’t seen the point of finishing off a mall that would have no stores in the near future.

Empty halls of the ghost mall

A group of men soon overtook us and marched up a stationary, broken down escalator. I joined them. We went up to the second floor, which was even more bleak and unfinished than the first.

“Are they investors?” I asked my guide about the men whose group I had just crashed.

“No, they are visitors on a business trip,” he responded lightly.

It turned out that the guy who was awkwardly shadowing me was actually a bona fide tour guide for the ghost mall. It was actually his job to give visitors tours of this empty carcass of a shopping center. The group of men that I found myself with were purposefully taken to this abandoned mall as part of their recreational tour of the Zhengdong CBD. It then became very clear that China’s forsaken developments mean something very different to the Chinese than than do to us foreigners.

In China, abandoned malls and ghost cities are not taken as ominous signs of financial uncertainty and impending economic doom, but they are seen as bounties of potential and opportunity. Likewise, the Chinese don’t try to hide their massive, under-populated, and lifeless developments. No, they flaunt them. Nobody here in China is admitting defeat, they are just getting started.

Maybe someday this will be a commercial center?

“Did you know that people in America say that this city doesn’t have any people in it?” I prodded my guide.

He was familiar with the reports I was referring to, and was not shocked by my question.

“This is a new development,” he spoke with finality. He may as well have said Rome wasn’t built in a day.

Things like this take time.

“What do you think of Zhengdong?” he suddenly asked.

“I think it has potential,” I replied. I wanted to say that I think the place is an all out miracle, but I held back — I didn’t want to have to record myself getting all gushy in a report that was intended to tear a hole in this country’s insane over-development.

“What do you think?” I returned the question.

“I work here so I think it is very cool.”

“Do you think there will be stores here?” I then asked

“Yes, in one year,” he spoke with certainty.

This phrase sounded like wishful thinking or public relations BS, but from looking at how this new district has grown in such a short period of time, I couldn’t doubt him.

“More and more people are coming,” he continued.

“Are they coming quickly?”

“Yes, very quickly.”

Fake Nike sign above vacant store

I couldn’t argue, from what I’d seen so far, what we call “Chinese ghost cities” in the West are often really just new cities at various stages of being developed. It is true that we were walking through the skeleton of a mall, but it was one that at least has a chance of being filled with muscle tissue, blood, guts, a heart, and the vital pulse of commerce. We have to remember here that Shanghai’s Pudong business district was very much underused for years after its inception, and now it’s a symbol China’s economic prowess.

China is on a future kick. This is a county that is hastily racing for the future, but is one that is also patient. No alarm bells or whistles are going off in China about ghost cities and failed developments. There is no question here that just about everything that is being built will someday be utilized. Perhaps this is wishful thinking, perhaps it’s naivety, but it’s far too soon to tell.

People gathered in the park in the center of the CBD

I exited one mall and then made for another. Unmentioned in the 60 Minutes report is that right across the way from the Orient Center ghost mall is an even larger shopping center called Mid Town Seven. The only difference is that this one is completely full of shops, restaurants, and people.

The Mid Town Seven mall is actually seven large shopping centers that stretch around the bottom arch of the CBD for seven blocks. I entered this colossus of commerce and found a cheap restaurant. I took out my laptop and got online as I chowed through my meal. I loaded up the 60 Minutes ghost city report and thought it would be interesting to show it to the people working in the restaurant. I invited the waitresses over to watch, and they curiously sat down around me. I pushed play and then roughly translated what was being said on the video. The girls watched as a couple of foreigners stood in the very city they work in — the very place we were currently sitting in — and proclaimed it to be deserted.

“But we are here!” one of the girls exclaimed. The others looked equally perplexed.

“Are they lying?” I asked them.

“Yes, we live here,” another girl chimed in.

I can’t say they were offended by the video, it simply seemed too ridiculous and surreal for them to take seriously. Imagine watching a foreign news report which claimed that the town you live and work in is desolate and abandoned.

Girls watching the 60 Minutes video which claimed nobody lives in their city

But 60 Minutes was not the only major news source to recently cast Zhengdong as being a failed development. Since 2010 this area has been the butt of many major reports in the international media. The Daily Mail called it “China’s largest ghost city,” and the title seems to have stuck. Earlier this month, Business Insider claimed that, “The central business district [of Zhengdong] features a ring of significantly vacant skyscrapers,” and many other sources made similar claims.

High-rises which have people living in them

But it is no secret that Zhengzhou’s new area and the Zhengdong financial district are not ghost towns. For more that two years reports have been published from people who have actually been there which simply say: there are people here, this place is coming alive. In 2011, New Geography visited Zhengdong and fully debunked the claim that it was deserted, the Heartland Institute also made a similar claim the same year, and the Chinese media, of course, has not been quiet about the fact that this new development is not what the big international news agencies say it is. These reports have largely been ignored by the Western mainstream media, who have entrenched themselves so deeply in the position that China is full of ghost cities that it seems difficult for them to climb out and see these places for what they are.

I then left the financial district and headed north into the residential part of the Zhengdong new district. New housing developments were packed in tightly here like a bundle of needles soldered together on the end of a tattooer’s quill. I do not mean to claim in this report that Zhengdong is not over-developed and under-populated. I do not mean to say that this place is functioning at 100% capacity. What I am pointing out is that the truth is spread graciously between two extremes: Zhengdog new district is neither a ghost city nor is it yet thriving. The truth is always more complicate and complex than a 12 minute television news report can capture.

A sea of high-rises stretching across Zhengdong New District

But 60 Minutes simplified the situation by simply calling the entirety of Zhengdong barren and deserted — they went for hype and got it, but rendered their report a work of fiction in the process. They went into skyscrapers full of businesses and then called them abandoned; they showed occupied high-rises and claimed nobody lives in them; they filmed in an abandoned mall but ignored the thriving one nearby; they filmed areas that are not even built yet and used it as an example of how people are not moving into the district. 60 Minutes did not find a ghost city in Zhengzhou, they created one.

As I descended the the elevator of the Novotel tower I made the acquaintance of a business man who worked there. We chatted as we walked outside and into the streets together. I then asked him the hallmark question of my ghost city investigation:

“Did you know that the Western media says that nobody lives here?”

“It is not true,” he replied sharply. As he spoke he gestured with a wave of his hand to the city that surrounded us as if to say, “Just look around, it’s obvious that isn’t true.”

I agreed.

“You tell America,” he spoke, “that there are people and business in Zhengdong.”

Additional photos:

Zhengdong CBD at night

Construction, construction, construction

This is what development looks like — China style

More construction

A sea of high-rises stretching across Zhengdong New District

High-rises rising out of the landscape like a bed of nails leading off into the horizon

Zhengdong CBD is truly a world class financial district

I believe this is going to be a hotel. It’s one of the landmarks of the Zhengdong CBD

This exhibition center is another attempt at monumentality

Novetel tower. This is a shot of Zhengdong that 60 Minutes made famous

In Gold We Trust

Fox News once did a report on Amsterdam, the city where I live. It made me and my friends Laugh Out Loud. Watch the next clip to find out why.

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