The REAL Ghost Towns of the Yangtze (or maybe the Huangpu)

I don’t know much about economics. In my cart at Amazon.com there is a copy of Economics for Dummies. I added it a few months ago when Iceland went bankrupt. I spent a week reading articles online trying to figure out why and being stymied by byzantine paragraphs occupied with things like transnational investment funds. Occasionally, I see things (other than my Roth IRA statement) that seem to me to be connected in some way with the global finance crash, but I mention this deficiency of mine at the beginning of this article in order to caution you that there may actually be no link between my observations and the current (recent?) economic crisis. Draw your own conclusions.

Right now Desiree and I are staying at a friend’s house while we wait for the baby to arrive (she’s four days late as I type this). Our friend is employed by an important multinational corporation which has put him up in a nice duplex; the second-largest dwelling I have seen during my two and a half years in China (the largest was inhabited by a British employee of an even more important multinational corporation).

It, along with a few hundred similar duplexes, is part of a big community, fully equipped with a wall, two gates, a complement of uniformed guards, three or four playgrounds, a decorative canal filled with water lilies, and other such pleasant amenities. I was out strolling through these amenities tonight when I came to a small river dividing this property from the one next to it. Across the water was a cluster of low- and medium-rise apartment buildings, painted a muted blue. It reminded me vaguely of a prison.

I had been walking along the river for a minute or so when I suddenly realized what was so uninviting about those apartments: all the lights were off. In all the windows. Another moment’s inspection confirmed that there were no strings of clothes hanging out to dry (a completely ubiquitous feature of any Chinese apartment building), no curtains, no posters, and no vehicles in the parking lot. It was completely uninhabited.

I walked the length of the wall that abutted the river, and did some counting. There were eleven small buildings, each with forty-eight visible units, and six large buildings double the size of the small ones. That means that I could see eleven hundred apartments (give or take) – all empty.

It definitely wasn’t an old complex, nor an uncompleted one. The paint job looked as fresh as any paint job ever does here, and the runty little palm trees that had been installed as landscaping starters were still surrounded by slabs of turf that showed ugly seams of earth between them, like Frankenstein stitching along the ground. There was a bright and shiny and un-played-upon playground, and I could see the green glow of EXIT signs through the stairwell windows on every floor.

So that means that someone, or more likely, a lot of people, decided to build one thousand one hundred plus apartments, with all the accoutrements, without ever obtaining one single human being to live in them.

Now maybe that’s par for the course. I’m not a builder or an investor. But I do know two things that seem important to me. First, an empty building is not a happy building. Somebody built that thing with this kind of math in his head: (1100 apartments x (3000 yuan per month – regular expenses)) – overhead = Lots of money for MEEEEE!!! And now he’s having to do some less pleasant arithmetic. I used to see abandoned buildings in Greenville – the empty Future Shop and K-Mart on Laurens Road, or the perpetually failing restaurants on Wade Hampton, across the bridge from BJU. They never looked happy either.

Second, I’ve seen far more empty buildings here in Shanghai than I ever did in Greenville. The complex that I saw tonight is less than half of the size of a major community on the same road as our school. It was empty for two full years, and even now only appears to be about one-quarter full. I’ve probably seen ten more just like it, all new. If you’re counting new and old abandoned buildings, then I have no idea how many I’ve passed.

So what gives? Is it that Shanghainese builders were banking on an emerging market that never emerged? Did the crash in investments prevent a new wave of Chinese professionals from obtaining newer, better accommodations? Is this some weird Shanghai way of doing business, necessitated, perhaps, by local laws and permits? Are the apartment buildings actually being used by invisible space vampires, bent on world domination (beginning with the Pudong district)?

Unfortunately, I have no idea. I sent an inquiring message to the Oracle of Stephen the Guy Who Knows Something About Everything, but I never heard back. If anyone else has any keen insights, feel free to pass them along. Until then, I’m steering clear of those empty complexes. Just in case it’s the vampires.

Dave