Mark Keenan: Chinese whispers can’t deny the reality of its ghost towns – and what could possibly be the biggest real estate crash in history

“What an incredible skyline! Thank goodness the tons of homeless people, drug addicts, graffiti, trash, street gangs and rag dealers are missing!”

hus crows a commenter who recently posted below a YouTube promotional video for Yujiapu, a brand new Chinese city built to look like Manhattan.

There have been claims that China’s “Manhattan Town” (as opposed to Manhattan’s Chinatown) is now one of the communist state’s many “ghost towns” — vast new developments containing dozens of high-rise buildings that have remained largely uninhabited.

A closer look at our Youtube Messenger poster account reveals that despite the Western-sounding name, they are largely subscribed to Chinese state media. Judge the credibility yourself.

The upbeat film portrays Yujiapu as a city of gleaming towers with flashing lights at night and crowds of partygoers hopping about (though there’s almost no car traffic to be seen).

Conversely, videos recently posted by tourists confirm that while Yujiapu misses the shortcomings associated with US cities, it also lacks a population. Tourist clips show pristine but deserted boulevards.

From 2006, just as Ireland’s ebullient property market was beginning to collapse, the Irish property sector rolled out, then Taoiseach, Bertie Ahern, his Fianna Fail party colleagues and bank-employed ‘economists’ rolled out to don the green shirts and improve Irish property prospects public places; just as the market was waking up.

Bertie circled around the “naysayers” (the label the real estate industry gave to those who were negative about bricks and mortar) and the “doommongers” who Bertie claimed had an interest in “talking down” the economy.

The Taoiseach called for “practical patriotism” and famously proclaimed in July 2007: “To sit on the sidelines, groveling and wailing is a missed opportunity. I don’t know how people who do this don’t commit suicide.”

China is leaning on its red-jersey cyberwarriors today as “practical patriotism” and desperation bloat its real estate market.

They’re currently raving about anything on social media that mentions the problems in the real estate sector as China continues to slide toward the biggest meltdown since humanity fell from trees.

Though they post under Apple Pie names (like Susan Smith, Charles Baker, etc.), the bots can be identified by their prose — stilted, gleefully gossipy, over-the-top party-positive language.

They top off everything that depicts ghost towns as ghost towns. These are still largely empty, although they were put into operation 15 years ago.


Old England Chinese Style: Thames Town, Shanghai

Take Thames Town for example, which is designed to look like ‘London’. It started in 2006 on the outskirts of Shanghai and was designed for 10,000 people.

It’s a mix of fake Stratford-upon-Avon and fake Belgravia, with old pubs, red phone boxes, shops, canals and pedestal statues (including Harry Potter and James Bond). There’s even a replica of Bristol’s Christ Church, faithfully reproduced, spire and all.

Prices soared here after its introduction that the students and university staff for whom it was designed could not afford to live there.

Today almost all shops are closed and there are only a handful of tourists on the streets. Like most Chinese ghost towns, it’s extremely clean and immaculate.

Unlike the old Irish spirit houses, the houses have all been completed and sold. But hardly anyone lives there. Most are tied up as investments.

The biggest problem for Chinese authorities trying to control the news is pesky random tourists who are attracted to visit ghost towns and then post on social media. Their phone cameras clearly show that nobody is home. The bots respond by posting things like “Everyone was gone that day”.

In addition to the Manhattan and London recreations, we have an Amsterdam and a Paris and six other themed mock western cities. Chinese Paris (Tianucheng) even has its own 300-foot Eiffel Tower.

In their online competition, the Chinese criticize western media, which reported on the biggest ghost towns years ago but then didn’t come back and check them out after they were “fixed”.

You cite the example of the biggest ghost town of all. Ordos in the northern Mongolian district of Kangbashi was built for a million people. Work began in 2008 and by 2014 it was reported that only 2,000 people lived here.

Now Chinese supporting media are trumpeting that at least 200,000 live in the country. And they’re pretty open about how they did it. They moved a number of important Chinese universities and important schools to Ordos.

Then, in one-child country, they decreed that families who wanted their children to attend these top colleges had to own a home there. job done. You are happy with yourself.

Despite all this, random tourist posts reveal that Ordos still looks dead.

But it’s this kind of extreme government support measure that shows us why the Chinese property market hasn’t crashed yet, despite various commentators (including this one) predicting it back in 2014.

In a country where the state owns all the land, owns the embassy, ​​and is the only beneficiary of land sales, the state can also make hitherto unrealized efforts to support property. And it did. Imagine if the Irish government had continued to support our volatile property market from 2007 to now? Imagine the size of the potential bang?

Now apply this principle to China-sized multiples.

Since 2007, China has simply continued to borrow, build and sell well past the point where there is enough housing for everyone.

Europe and the US together manage to build 3 million houses every year; but China built 10m. This is in a country where 90 percent of the citizens have owned their own house for years and where the population is actually shrinking.

In 2017, an estimated 20 percent of homes in China were vacant. That’s 65 million properties, enough to house all of France with one house per person. But if they’ve built 10 million homes a year since then, they could have 100 million plus vacancies by now!

Today, an estimated 15 percent of Chinese people are employed in the real estate sector, which accounts for 25 percent of GDP and most of local governments’ annual income.

It has been reported that China’s real estate assets are now more than US$60 trillion. Also consider that Chinese citizens could not invest in anything else. No stocks, no cryptos. Therefore, economists also estimate that 60 percent of China’s domestic wealth is held in real estate.

In 2020, the Chinese state tried to apply the brakes (so to speak) with new liquidity rules for the developer giants.

But now they can only keep up by outsourcing existing houses. And if all these real estate giants start selling at once? Well…. kerbum!

Evergrande, with $300 billion in debt, defaulted in December and now other big players like Kaisa, Shimao and Fantasia are teetering. If it happens, the crash will be nuclear. It will affect the US and Europe, where big companies and banks have investments in China.

Some experts claim that China’s economy, like Russia’s, may date back to 1997.

Just where it would leave us is unclear. Mark Keenan: Chinese whispers can’t deny the reality of its ghost towns – and what could possibly be the biggest real estate crash in history

Fry Electronics Team

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