Halted subsidy leaves 'China's Dubai' a ghost town
Staff Reporter 2012-12-24 13:53
New theaters in Kangbashi, Ordos. (Photo/CNS)
Once crowned China's Dubai and Little Hong Kong by local media, Kangbashi New Area in the city of Ordos in northern China's remote Inner Mongolia is today little more than a ghost town. Promised government subsidies for entrepreneurs have dried up, towering apartment blocks remain largely vacant and grand monuments keep watch over empty pedestrian boulevards, the Chinese-language 21st Century Business Herald reports.
Kangbashi is the result of an ambitious 2004 plan to create a state-of-the-art commercial and residential zone in Ordos. In the first three years of the project city authorities spent 1.7 billion yuan (US$272 million) to transform the area into a modern metropolis with high-tech public works, gleaming skyscrapers, public art, museums, libraries and vast residential authorities built to house 300,000 people. These ambitions, however, proved quixotic. At the end of 2010 the area had just 28,000 residents, a staggering overestimation of demand due in part to soaring property price from unchecked speculation.
In the same year, the local government announced a suite policies aimed at invigorating local business which in turn, planners hoped, would attract residents. The package included three years of government money for businesspeople willing to set up in the area. Yet a number of business owners told the newspaper that for the past two years they have not seen any of the promised money and trade remains weak to the low residential density. Dozens of stores on Kangbashi's main street have since been sold, leased out at reduced rent or simply abandoned.
For their part, city authorities explained the halted subsidy to the paper saying there was an unforeseen budget shortfall and promise to make up for it if they have funds in the coming year.
A local entrepreneur surnamed Deng said he received 50,000 yuan (US$8,000) from the government in 2010, but nothing last year or this. He says the promised three-year subsidy was one of the main factors in his decision to open a boutique hotel in the area. "The government promised subsidies for three years. They did not fulfill it once we came here," Deng was quoted by the newspaper as saying.
Wang, another hotelier, said rent, living cost, and maintenance fees are particularly expensive in Kangbashi, but the business high season only lasts for three or four months a year.
Wang said it is almost certain more stores will go bankrupt in the coming months due to the frozen subsidy scheme and rising rents even in the face of weal demand.
The vast majority of Kangbashi's population is made up of government employees and their families, many of whom purchased homes at discounts of 50% or more. The remaining houses were mainly bought by coal tycoons residing elsewhere.
