Visiting Ordos – China's ghost city in the desert
Ordos was once considered the largest ghost city in the world. A metropolis built in the middle of the desert that no-one wanted to move into.
With 1.4 billion people, China is the world’s most populous country. Construction is everywhere. But some megaprojects fail. Handelsblatt correspondent Stephan Scheuer visited the ghost city of Ordos.
Background
Ordos Kangbashi, in northern China's Inner Mongolia, was built from scratch in the 2000s. Designed for over a million inhabitants, the city stood almost empty for a long time – wide boulevards, imposing administrative buildings, dozens of residential high-rises with no tenants. The report captures the surreal atmosphere of this new backdrop.
Ordos was the world's best-known example of Chinese real-estate speculation. Local governments systematically boosted their revenues in the 2000s and 2010s by selling building land: cities built on a larger scale than the population could realistically grow. Apartments became the preferred asset class of an ambitious middle class – not for living in, but as speculation. By 2020, an estimated 50 to 90 million apartments in China were permanently empty.
The phenomenon was a precursor to a crisis that broke out openly in 2021 with the collapse of property developer Evergrande. Evergrande had piled up over $300 billion in debt; shortly afterwards Country Garden and other large developers followed. China's real-estate market, long the world's largest asset class by value, has been in a deep correction ever since. Prices have been falling for years, new construction volumes have dropped sharply, the construction industry is in a structural crisis.
The macroeconomic consequences are significant. China's household sector historically had a large share of its wealth tied up in real estate – losses there feed through to private consumption, slowing the post-pandemic recovery. Local governments have lost a large share of their revenue from land sales; the financing of infrastructure and social spending has come under pressure in many regions.
Ordos itself has slowly filled up over the years. The local government moved administrative units and university campuses into the new city; schools and hospitals followed. Today an estimated 150,000 to 200,000 people live there – far from the planned million, but enough to revise the picture of a completely empty ghost city. Other new-build areas in China have been less lucky: they have been either shut down or remain empty.