LEFT TO ROT: Inside China’s Apocalyptic ‘Ghost Cities’ Where 65Million Homes Lay Deserted as Communist Party Faces Economic Chaos (The Sun)
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Max Woodworth, an expert in Chinese urbanisation, said China’s developers and buyers have “tremendous faith” that the value of their property will steadily creep up – and prices won’t crash. He told Sun Online: “Even people who purchased homes in so-called ghost cities, in my experience, rarely express regrets…. They have come to believe time is on their side and these cities will fill out over time and keep the home values steadily rising.”
“Ghost cities are still a real problem if we understand the phenomenon as a surfeit of real estate.”And governments get massive sales revenue from leasing the land out to developers. “It remains a cornerstone of local economies,” Woodworth said. “The land system in China produces strong incentives for city governments to promote real estate and land development as a way to raise to revenue and generate economic growth.”
Roger Garside, Associate Fellow at the Henry Jackson Society, told Sun Online that China is facing “debt mountain”. Mr Garside said: “The Communist regime has known full well for over a decade the risks that have been building in its economy… It has been relying excessively on debt to fuel growth since 2008, a reliance which is most strikingly illustrated by the property sector, until it now has a debt mountain of a height such that no nation has ever succeeded in reducing it significantly without either inflation or recession. “Its return on investment has been steadily declining. More and more of its economic activity has been unprofitable.” READ MORE
