Ghost City? We hear about ghost cities in China, about entire cities without inhabitants. Zhengzhou is often cited as a prime example. I’ve recently returned from Zhengzhou and can share some anecdotal, unscientific observations which may or may not shed some light on the situation on the ground.

The photo you see is of an unfinished and empty new building development next to one of the universities I work with located in Zhengzhou’s new technology park area. This empty building complex, I thought, would provide an obvious navigation aid to help me return home from my cycling excursions. It turns out, as I returned from cycling further a field, I’d think I was nearing home only to realize that I’d stumbled upon yet another, after yet another similar empty building development.

Each of these developments include 15 to 25 buildings of 20 floors minimum, any one of which would be described as a major project in my hometown of 150,000 people. In that limited context, one can start to understand the “ghost city” label. But this is by no means the context of Zhengzhou.

Zhengzhou is the capital of Henan province, the most populous province in China. The city itself has a population of approximately 10 million people, hardly uninhabited.

Four years ago, when I was last in Zhengzhou, I saw empty developments. At least in the main, these now seem to be filled with people. Restaurants and support businesses have sprouted up and are plentiful. There is a community atmosphere. Even around the corners from the new empty developments I see today, there are businesses popping up – produce stalls, restaurants, bike and motorbike outlets, along with schools, parks, recreation facilities, most that one might want.

Will these new developments be filled up over the next four years, just as the last were from four years previous? This time, there are many cranes which appear to be inactive. That said, the cranes remain in place, together with sales offices and at least some workers. To some extent, the answer depends on whether the economy can keep chugging along at its healthy pace.

Measures have been taken to keep mortgage debt to consumers in check. The larger question is whether credit to the developers is in check. There are likely unaccounted for bad debts on the books of Chinese lenders and these may well be significant. On this, my conjecture has been that the assets and the liabilities are largely domestic and China is in a relatively strong position to weather a storm.

On balance, while there has been a great deal of slapped together building, there has also been a tremendous investment in sound infrastructure that will yield for the country for decades to come. Urban growth will naturally be boosted as rural/urban population proportions approach those of more “advanced” economies.

Will China be able to walk the razor’s edge as it deals with balancing its three “Cs” of Credit, Consumer ambitions, and self-acknowleded Corruption? In arguably more dire economic circumstances, Western economies have managed to find a balance of their own since the most recent storm of 2008.

I hope I can ride through the streets of Zhengzhou in four years time and report on the outcome.

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