Monday, February 24, 2014

China Bubble: "Welcome to Ordos: The World's Largest 'Ghost City'"

These two posts about Ordos are amazing. From 1st,

"For all this seeming normality however, downtown Ordos is presided over by a series of doom-struck towers, grey office buildings, flats and shopping malls – and most of them are completely empty. [...] Immediately above us towered what could have been the headquarters of a bank – forty floors of office space, wrapped in a shell of mirrored panels. In its un-maintained state however, these reflective scales were falling away in great swathes, to expose the bare concrete beneath."
From the 2nd, about the "Kangbashi New Area,"
"Ordos fell away beneath us: a wide, sweeping wasteland of empty towers and silent, disused streets. I tried looking out for signs of motion, clues to life in the metropolis. The odd car moved slowly along the main road, where it looped around the centre of Kangbashi to cross the Ordos bridge, and out towards Dongsheng – but for the most part, from this height, Kangbashi looked like a model city; its radical architecture reduced to novelty ornaments, its unfinished towers scattered like broken bricks across a sandpit."
Remember Tianjin - the Chinese city with the "planned Manhattan"? It's 900 km from Ordos. These don't appear to be isolated incidents of misallocation. The bullish-China excuse for these vacant cities is usually that the Chinese build them and then people move in, and we are just seeing an intermediate stage. (The "build it and they will come" defense.) Except, Ordos has been empty for years. These are clearly centrally planned cities that the market didn't want.

Commodity investors: why would you want to outbid these lunatics for commodities? They won't be able to keep it up forever.

1 comment:

CP said...

Iron ore down 37% since this post.