Remember Ordos the ghost city?
Thanks to its coal, the place was “booming” (sort of). Not only was it a bizarre place with a real estate “bubble” (actually, I quite want to find a word to describe something which is more than a bubble) even though the place is seriously over-housed, it was also a hot place for underground lending practices that we have discussed here every now and then (see here for more on debts in China).
But this city is dying. For a city which is clearly too large to accommodate its people, it is curious to see the headline on Sina that migrants are leaving Ordos. After the underground lending bust in Ordos, a lot of people involved in underground lending have gone bust. Now the economy cools together with the death of underground credit, the real estate market is dead, and constructions are halted everywhere as people are leaving.
In the busiest area of the city, Dongsheng district, 300 thousand migrant workers that used to be living and working in Ordos seem to have disappeared after the bust, as a cooling economy and a dead real estate market mean that they can no longer earn the money they used to. The impact of a cooling economy goes beyond that. Service industries like restaurants are feeling the pain as their customers seem to have all disappeared.
There are some who are more optimistic, because “we still have coal,” and the government will not want to see the city dying …
This article originally appeared here: Curiously, people in the ghost city Ordos are leaving
Also sprach Analyst – World & China Economy, Global Finance, Real Estate
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