Recently, a veteran property consultant warned that many places in Johor will become ghosts towns because of the top-down nature of development there, particularly in the Iskandar region.
In an interview with FMT, chartered surveyor Ernest Cheong said he feared there wouldn’t be enough people to occupy the thousands of houses and commercial buildings being constructed.
Cheong may have been taking a cue from what seems to be happening in China.
China, boasting the largest population in the world, is home to 23 provinces, four municipalities and five autonomous regions and also, apparently, to hundreds of ghost cities.
Early last year, the Business Insider quoted photographer Kai Caemmerer as saying that the development of these largely unpopulated cities was, in a sense, unconventional.
“Unlike in the US, where cities often begin as small developments and grow in accordance to the local industries, these new Chinese cities are built to the point of near completion before introducing people,” he said.
Wade Shepard, the author of Ghost Cities of China, says these ghost cities are actually a result of the country’s urbanisation movement, which began in the early 80s and exploded in the 2000s.
Shepard takes a more positive view of the ghost cities and says that building a new city from the ground up is a long-term initiative, a process that China estimates takes roughly 17 to 23 years.
In an article posted on blogs.reuters.com in April 2015, Shepard said it was premature to label these places as “ghost cities”.
“The term ‘ghost town’ is technically a misnomer in this case. A ghost town is a place that has become economically defunct. In other words, a place that has died. What China has is the opposite of ghost towns. It has new cities that have yet to come to life.
“By 2020, Ordos Kangbashi plans to have 300,000 people, Nanhui expects to attract 800,000 residents and five million people are slated to live in Zhengdong New District. China’s new cities are just that: new.”
Ordos Kangbashi
Ordos Kangbashi is often referred to as China’s largest ghost city. Shepard may have been on point when he said this was a misnomer. In 2016, in an article he wrote for Forbes, he said this new city had a vibrant downtown area full of shops and restaurants, along with a population approaching 100,000.
There is one catch.
“According to Beijing it doesn’t exist,” he wrote. “However, Kangbashi’s administration is attempting to change this by petitioning the capital for county-level city status, which, when granted, will formally put the place on the map.
“The interesting thing is that Kangbashi’s application for official recognition conspicuously leaves out the area to the south of the Wulanmulun River. This, perhaps not coincidentally, happens to be where the majority of its empty housing is located. Essentially, by snipping off this area from Kangbashi proper, the place suddenly becomes almost completely inhabited, having just four or five under-occupied housing complexes.”
Lanzhou New Area
But there are other new towns in China that are ghostly and other observers have taken a grimmer view of where China’s city-building is going.
Last year, The Washington Post reported that although hundreds of hills on Loess Plateau were flattened by bulldozers to create Lanzhou, the city had become stagnant, with its streets almost deserted. Lanzhou is the capital of Gansu province.
The paper quoted Rodney Jones, founder of Wigram Capital Advisors in Beijing, as saying the city epitomised what was wrong with China’s economic model.
“Where Gansu goes, China goes. You’ve had massive credit growth and investment in projects that don’t generate economic returns. Now you’re facing two shocks — you’ve got to stop credit growing and deal with the bad loans, and you’ve also got to see how the economy expands once this credit boom is over.”
Nanhui New City
It seems all the naysaying and labelling have done little to dampen China’s resolve as it continues to build new cities. The construction of Nanhui New City began in 2003 and is scheduled to be completed in 2020.
According to news.com.au’s travel reporter and editor, Kate Schneider, the Nanhui project has cost US$7 billlion and is intended to serve as an urban centre to support nearby Yangshan Free Trade Zone.
Developers are hoping the city will transform the coastline into a commercial and tourism epicentre and are estimating 800,000 people will move in by 2020.
“While it remains unfinished and eerily empty for now, office buildings, entertainment facilities and shopping centres covering up to 500,000 square metres are planned for the city,” she wrote.
Malaysia, China, Iskandar
Malaysia’s slant to China has received criticism from several quarters, with some going as far as to claim that Prime Minister Najib Razak may be selling the country to China through numerous deals.
Former prime minister Mahathir Mohamad has been one of the most vocal proponents of this particular theory. He has pointed to the sale of plots of land in Johor Iskandar to mainland Chinese.
“We are just going to see large chunks of land in our country being developed by the foreign buyers and being occupied by them,” he said. “Eventually they will demand citizenship and they will participate in Malaysian politics, including in elections.”
Cheong, however, said Iskandar was just one of the many places around the world where the rich people of China were buying properties. He said they would look at Iskandar as a place to invest in rather than to relocate to.
“So, even if all the units being developed by Chinese companies are sold, who will stay there?” he asked. “There is a demand for affordable housing from locals, but the Chinese developers aren’t building affordable housing. How many can afford to buy or rent these places?”