“China’s Manhattan” is having a hard time attracting residents.
In the country’s Yujiapu Financial District, about 80% of the office space is empty, and construction on multiple buildings has stopped, according to the New York Times. The vacant city could represent a breakdown of the growth model that has fueled China in recent years.
The country has mainly focused on selling large amounts of land to developers and borrowing to subsidize construction, which has resulted in jobs and new cities. However, the country is no longer growing as quickly as it once was, and it is no longer clear if this model will work.
“China’s economy has depended on building for the future, and there are considerable signs that they have overbuilt,” director of China research at the consulting firm Rhodium Group Logan Wright told the Times. “That probably means much slower economic growth in the next decade compared to China’s recent path.”
The Yujiapu Financial District is part of Tianjin, a city on the coast not too far from Beijing. It had one of the country’s highest growth rates until the economy slowed, and it is now one of the most financially troubled and slowest growing parts of China.
The local government has continued borrowing despite the empty buildings, raising $36 billion last year through new loans, and Julliard still plans to open its second campus in the city. Local real estate consultant Michael Hart said it was too soon to dub Tianjin a failure.
“It’s like going to see a five-act play,” he told the Times, “and you’re halfway through Act 1 and calling it a lousy play.” [NYT] – Eddie Small