China’s High-Growth Ghost Towns

In the gritty Inner Mongolian wind, I stood at the pinnacle of the global economy, at least in terms of GDP growth: the main drag of one of the fastest growing cities in the fastest-growing region in all of China, the world’s supposed new economic powerhouse.

Built in a breakneck five years, Kangbashi is a state-of-the-art city full of architectural marvels and sculpture gardens. There’s just one thing missing: people. The city, built by the government and funded with coal money, its chief industries energy and carmaking, has been mostly vacant for as long as it has been complete, except for the massive municipal headquarters. It’s a grand canyon of empty monoliths. In a paradox only possible in today’s economic system, Kangbashi manages to be both a boom town and a ghost town at the same time.

Kangbashi represents a particularly destructive economic force at work in China today: an obsession with GDP that ignores all other metrics of progress or human capital. GDP as calculated in China — or the rest of the world, for that matter — doesn’t make any distinction between quantity and quality, or between creative and destructive expenditures.

Due to the industrial pollution billowing out of the country’s GDP-enhancing factories and mines, cancer is the leading cause of death in China. A recent government survey showed that 30 percent of children in Yunnan province suffer from lead poisoning. Perhaps the biggest and most destructive GDP boost came from construction of the Three Gorges Dam, for which 1.24 million people were evicted. Even some of the newly rich, however, shower in tainted brown tap water.

Meanwhile, in places like Kangbashi, an accelerated development in the real estate market has not been matched by long-term sustainability, and in recent months, predictions have grown louder that China’s real estate bubble is about to burst. This debate has been batted back and forth by columnists and TV talking heads lately. For now, income growth is still outpacing housing price growth, meaning that the real estate market is not technically a bubble.

Still, China’s emphasis on growth at all costs is creating some bizarre monsters, and Kangbashi is one of them. Six years ago, Ordos county officials decided to move their headquarters out of old, cramped Dongsheng and into land that was then occupied by two small villages inhabited by about 1,400 people. By the end of 2008, the new district of Kangbashi was crisscrossed with 2.4 billion yuan ($352 million) worth of roads. Officials initially said they expected the population to reach 100,000 this year and 300,000 by 2020. They also say the population reached 50,000 last year, which seems improbable given that pedestrians on the street were outnumbered by street sweepers. A local real estate agent, Cao Ting, told me it had actually been easy to sell apartments. She said 80 percent of the apartments had been sold. I believed her even though 80 percent of them looked empty, with no curtains or furniture visible during the day and no lights on at night. The buyers were mostly investors or future residents waiting for schools and hospitals to open before moving in.

The new buildings look great from the outside, and they’re economically fine on paper, if you believe the local government. And they may continue in this state, since the government will prop up the property market because it holds up so much else as well. Local governments’ revenues are completely dependent on land sales. Eventually, perhaps, the population will catch up with this accelerated development.

When I went to visit last October, however, the lonely residents of Kangbashi didn’t seem likely to be welcoming new neighbors anytime soon. Over glazed pork one night, I struck up a conversation with a middle-aged Chinese interpreter for German engineers employed at the state-owned coal mines nearby. Later that night, he showed me how he staves off the loneliness: sitting alone in his hotel room with a microphone in his hand, crooning along in online karaoke rooms.

Kangbashi’s eight-story library has a computer lab with about 100 brand-new computers, but I saw only an attendant and two teenage boys playing games. Near the town’s reservoir, two large screens were showing footage from the National Day parade celebrating the 60th anniversary of the People’s Republic. I looked up to see a sea of people in a clenched-fist salute in Tiananmen Square. But I was the only one watching. The only other people in sight were a dozen laborers landscaping the center dividers, their faces shrouded against the cold wind.

Across the reservoir, cranes were parked around construction sites. A trade and commerce district is in the works, according to blueprints decorated with cartoon animals and wispy shooting stars in the style of Disney’s Fantasia. The image of spindly glass skyscrapers reflected on the water bears a striking resemblance to Dubai, funded by government revenue from fossil fuel extraction. But whereas Dubai is already bankrupt, here construction continues. At least, for now.