Xi Jinping’s Project Leads to Real Estate Bubble Collapse: Giant Ruins Emerge in China | FRIDAY DIGITAL

Xi Jinping’s Project Leads to Real Estate Bubble Collapse: Giant Ruins Emerge in China

  • Share on Twitter
  • Share on LINE
The “City Mansion Project” in Nantong, eastern China. Construction has been suspended.

<Rooms are spacious and comfortable with good views. Room sizes range from 96 to 142 square meters.

In the eastern Chinese city of Nantong, a cluster of condominium towers spread out behind an attractive advertisement like this one (see photo above). However, construction was halted due to financial difficulties. Now they lie in ruins.

The developer is Chinese real estate giant Heki Guiyuan. However, the company has been in financial trouble since around 2011, with debts totaling nearly 31 trillion yen and defaulting on some of its bonds in October.

Similar “huge ruins” are now appearing all over China. Kota Takaguchi, a journalist with extensive knowledge of the situation in China, explains the background to the collapse of the real estate bubble.

The mainstream of the real estate business in China is reservation sales. Major companies start selling condominiums before they are built. They use the funds they raise to build new properties as they go along. Naturally, the reckless expansion leads to ballooning debt. When the authorities, unable to see this, began tightening debt ratios and other factors, the companies suddenly found themselves in financial difficulties and construction came to a halt. Real estate projects in China are not limited to building condominiums, but also include shopping centers, schools, hospitals, and other facilities. In some cases, entire towns have become ghost towns.”

It is not only private real estate that has been abandoned. Projects under the leadership of President Xi Jinping are also going under construction.

The “Xiong’an New Area” is being built in the suburbs of Beijing. More than 14 trillion yen has been invested in this smart city that makes full use of digital technology. Following in the footsteps of Deng Xiaoping’s Shenzhen Special Economic Zone and Jiang Zemin’s Shanghai Pudong New Area, Mr. Xi wants to make it his legacy. However, there is no clear vision like the financial center of the ‘Shanghai Pudong New Area,’ and people are not gathering there,” said Mr. Takaguchi.

China’s real estate market is deteriorating without any drastic measures. The number of huge buildings left unattended due to construction stoppages is likely to increase.

Inside the abandoned amusement park owned by the Hengda Group, a real estate giant, in the eastern city of Liouan.
The latest expressway in the Xiong’an New Area, a project that Mr. Xi has been focusing on, is a sad sight.
A U.S. Capitol-style hotel in Wuhan, central China. …… The construction of the hotel failed and vagrants are living there.
Weedy lodging facilities. Construction has been halted and weeds are growing thickly.
The 597-meter-high “Gao Yin Financial 117” in the eastern city of Tianjin is famous as the “world’s tallest unfinished building.
Casinos without customers” are also in ruins overseas. A casino in Cambodia is so unfinished that few people visit it.
Hengda Hangzhou Commercial Center” in Hangzhou, eastern China. Abandoned, the building is in shambles, and no one lives there.
The reality of an abandoned theme park in Taicang, eastern China. The huge project was cancelled due to the Hengda Group’s financial difficulties.
A major shopping and residential complex in the eastern city of Fuyang was closed before it could fully open. Closed before full-scale opening.
A Chinese company’s plan to develop an investment zone in Cambodia has been suspended due to lack of funding.
The railroad project near the border with Mongolia has not been completed, and only the piers are still standing. ……

From the May 3, 2024 issue of FRIDAY

  • PHOTO. The New York Times/Redux/Afro Raul Ariano/Redux/Afro Abaca/Afro CFoto/Afro Reuters/Afro

Photo Gallery12 total

Photo Selection

Check out the best photos for you.

Related Articles