The myth of China’s ghost cities.

Chinese Ghost City

China has “ghost cities” -- blocks and blocks of empty structures. But unlike those of the Golden West, Chinese ghost cities represent the future, not some lost past. Wade Shepard, author of Ghost Cities of China -- a book which chronicles his research on China's urbanization movement, tells us how it works in China’s boom economy:

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, when rural areas began being rezoned as urban en masse and the city took center stage in China’s plans for the future.

In the early 2000s . . .urbanization . . . 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 to more than 23 million from 6.61 million.

Mega-regions (click to enlarge)

China’s broader urbanization movement shouldn’t be thought of as a developmental free-for-all. . . Ten massive new urban conglomerations called mega-regions [see map] have been proposed in strategic locations across the country. These are essentially city clusters of 22 million to more than 100 million people each that are to be connected through infrastructure, economically, and, potentially, even politically.

Shepard says Beijing forces local municipalities to cover 80% of their expenses with only 40% of national tax revenue. Land sales cover the difference, with municipalities buying cheap rural land, re-designating the land urban, reselling it at the higher urban rate, and pocketing the difference.

Developers buying these new plots must build something -- on land far outside the mature, built-up urban areas.  The result, according to Shepard: vast apartment complexes, giant malls, and commercial streets with no population base to support them.  Ghost cities.

Most Chinese urban developments move through this phase to fill out with businesses and people:

Essential infrastructure gets built, shopping malls open, and places where residents can work are created. [W]hen urban areas of high-density housing are even half full there’s still a large number of people living there — more than enough for the place to socially and economically function as a city. It generally takes at least a decade for China’s new urban developments to start breaking the inertia of stagnation. But once they do, they tend to keep growing.

But “Quartz,” a New York-based business web-news outlet, cautions that

China’s mega-cities and mega-regions aren’t being built with an eye toward maximizing the advantages and minimizing the downsides of creating these massive metropolises. Most importantly, the mega-regions are being built around a small number of city centers, many of which are surrounded by concentric circles of commuters and bedroom communities that makes traffic hellish and pollution even worse.

According to “Quartz,” half the 10 mega-regions are either dominated by a single major center, or by a limited number of centers packed closely together. As a consequence, everyone will want to work close to city center, meaning sky-high property prices and transportation headaches.

 The new urban China. Anything but “ghost.”