Under-occupied developments in China

Media outlets often label under-occupied development areas in China as ghost cities or ghost towns.[1][5] However, the two terms are technically misnomers since the term "ghost town" describes places that previously had economic activity but have since become defunct and abandoned, while many under-occupied developments in China are new installations that have yet to receive residential occupation.[6][7]

Additionally, some reported cases of ghost cities are not in and of themselves administrative entities but instead districts built in the suburban region of functioning cities to provide accommodation for a growing urban population.[8]

Empty residential complexes in the Chenggong district, Kunming, Yunnan.

Bridge in Kangbashi, Ordos

The way in which property values are structured in China plays a role in the creation of "ghost cities", according to author Wade Shepard, who has traveled widely to research the phenomenon of China's underoccupied cities. "Economically affordable housing" must be lived in by the owner, and can not be bought and sold as an investment. The developer is only permitted to sell "economically affordable housing" at 5% over the cost of construction. By contrast, "commodity housing" can be bought and sold as an investment. Because housing is a physical object, and China's large population guarantees an ongoing demand for housing, commodity housing is considered a more secure way to store money. Except in some Tier 3 and Tier 4 cities, which have different government regulations, "commodity housing" generally sells as an investment.[4] In addition, these homes typically serve as future homes for the buyer's offspring to live in when they get married.[9]

Construction of "commodity housing" is driven by the disparity between urban and rural land prices. Rural land, which must be collectively owned, is redesignated by a municipality as urban-construction land, which can then be resold by the municipality at as much as forty times the price. Shepard explains that municipalities must pass on about 40% of their tax revenues to Beijing and are responsible for about 80% of their expenses. Hence, there is an incentive to seek non-tax-income streams. According to Shepard, as of 2015, "40% of the revenue that local governments in China make is from land sales." In 2012, this type of development created $438 billion (394 billion euros) for China's local governments.[10]

In 2015, Wade Shepard reported that developers acquire new plots of land from local governments and are mandated to construct something more or less immediately. Developers can't sit idly on vacant land and wait for the surrounding area to develop until it's economically viable. This creates the quick-buck mentality in developers to rapidly build in the new area without the necessary demand for housing.[10]

In 2021, Business Insider, reported that in 2020 China had about 65 million empty homes.[11][12] In the article, academic Xin Sun said in China there is a strong popular belief that real estate is the best way for preserving and generating wealth, leading to great demand for buying property; something the government encourages.[11] The Economist reported that in some areas demand for property greatly outstripped supply, typically in cites. However, at the same time in poorer rural areas few people were buying properties, and in those areas there was a glut of empty houses.[13]

• Chenggong District - the chief zone for the expansion of the city of Kunming. As of 2012, much of the newly constructed housing in Chenggong was still unoccupied, and it is reportedly one of the largest ghost cities in Asia.[14] However, some commentators expect it to become occupied over the next few years, as central Kunming is overcrowded. Some Government departments are to move to Chenggong in 2012,[15] and a subway line to the city center opened in 2013.
• Ordos City, Kangbashi New Area - described in 2009 by news media as a 'ghost city'.[16] By 2016, 100,000 people lived there.[11]
• Nanhui New City
• Yujiapu Financial District
• Yingkou - a prefecture level city in Liaoning province.[17] The prefecture level city has five years of unsold apartments with a number of abandoned projects.[17]
• Lanzhou New Area

• Chinese property bubble (2005–2011)
• Housing in China
• Real estate in China
• Spatial mismatch
• Caojiawan station

• Shepard, Wade (2015). Ghost Cities of China: The Story of Cities without People in the World's Most Populated Country. Zed Books. ISBN 9781783602186.