by Andrew Batson
Famously dubbed China’s “empty city” in a November 2009 report by Al-Jazeera English, the town of Ordos in Inner Mongolia has become the favored example of those convinced that China is in the midst of a runaway property bubble unmoored from reality.
Famously dubbed China’s “empty city” in a November 2009 report by Al-Jazeera English, the town of Ordos in Inner Mongolia has become the favored example of those convinced that China is in the midst of a runaway property bubble unmoored from reality.
The town’s mostly uninhabited new district of Kangbashi is now routinely cited by bearish investors, and got further unfavorable coverage in a photo essay and article in Time magazine earlier this year.
Bank of America-Merrill Lynch economist Ting Lu decided to pay a visit to Ordos to see for himself, and detailed the result in a fascinating report this week. He did indeed find a city that is, at least on weekends, largely empty.
But rather than the poster child for a national property bubble, Lu sees Ordos’ economic circumstances as mostly unique, and largely caused by the huge wealth it has reaped from its wealth of coal. In fact, he argues, the city is an interesting example of how a resource-rich area has fairly successfully handled the enormous windfall it has seen in recent years, and avoided the “natural resource curse.”
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| Ordos city in China, by AdamCohn |
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