Ambitious expansion plans by small and medium towns across China have lead to the creation of more than 3,500 “new areas” for residential and economic use raising fears many are destined to become ghost towns.
The combined projected population of these new areas is an “impossible” 3.4 billion people – 2.5 times the current number of people in the country, experts say.
China has been promoting inland urbanisation as a salve for its wobbling economy. Yet it’s hard to imagine Beijing really believes building two homes per head is a prudent prescription for an aging population. Whether the building spree signals policy paralysis, nihilism, or a damning prosecution of build-and-they-shall-come state capitalism is up for debate. What is certain is that between the private debt explosion in the coastal corridor and this sort of public miscalculation inland, there are plenty of reasons to be worried about China’s ability to reform or exercise restraint over local administrators.