China's eerie faux-European ghost towns

China's eerie faux-European ghost towns

There's a town on the outskirts of Beijing that might just be the strangest you'll ever see. The main street looks as if it was based on a child's crayon drawing—a riotous palette of pinks, blues, and oranges—and the residents are frighteningly still. In fact, most aren't even real. Instead, the town features such sights as a pair of petrified pigeons, yellow phone booths, and a statue of a sea dog gazing from a bridge.

Welcome to "Spring Legend," a mock-Alpine town located in Huairou, a designated green-belt district about 35 miles from Beijing. The town has existed for about five years, but it lacks something fundamental: residents.

Spring Legend has the feel of a dream come true. Entering the town's German restaurant—outside of which sits a statue of British Prime Minister Winston Churchill enjoying a bronze cigar—tables are set with fine china, wine goblets, silver cutlery, and linen, all neatly laid out for diners who never arrive. Then, a waitress dressed as a Bavarian fräulein appears and inquires how many there will be for lunch.

The town's motto is "The Beautiful Legend From the Alps" and indeed, compared to the livability problems of Chinese cities, Spring Legend has a pleasant environment. Tables are set with fine china, wine goblets, silver cutlery, and linen, all neatly laid out for diners who never arrive.

"We named it Spring Legend because it's close to the river and has a small creek running through it," explains Liu Xinhu, the chairman of Ding Xiu Zhi Ye (Spring Legend Properties). "It's extremely beautiful in the spring, too."

The town was conceived back in 2007, towards the end of a period of rapid development in Beijing that led to an increase in pollution and, correspondingly, a renewed interest among city-dwellers in a serene environment.

Spring Legend is empty for one simple reason: During the week, hardly anyone lives there. An estimated 80 percent of the town's homeowners also have apartments in Beijing, and, according to Liu, the general occupancy rate in Spring Legend is only about 60 to 70 percent. Multiple-home ownership among China's rich is not uncommon; University at Albany professor Youqin Huang has estimated that 15 percent of urban households in the country own two or more houses.

The nature of property ownership has changed greatly in China. Fifteen years ago, state workers (who then comprised much of the population) were assigned basic accommodation. But today, home ownership has become so important that young men struggle to find a girlfriend if they do not own their own home. Buying a place, however, is difficult: Average salaries in Beijing top out at about 4,500 RMB per month (around $750), while the cost of an apartment in the city center is around 43,000 to 52,000 RMB per square meter.

Why has China gone mad for housing? With strict capital controls and a state-controlled stock exchange that is volatile and risky, the tangible reassurance of evergreen property has made it a "fungible commodity," in the words of Anne Stevenson-Yang, co-founder of Beijing-based equities analysis firm J Capital Research. She says that homes are usually left empty in order to avoid any depreciation in value.

"Renovation costs are very high, so it makes no sense to rent if you are seeking capital appreciation," she explains via e-mail. "Remember that apartments here are sold bare, without flooring, ceilings, lighting fixtures or wall tiles. They all need to be installed, adding at least 20 percent to the cost [and] people expect to ... custom fit the unit."

This means that even in successful towns like Spring Legend—where a unit costs an average of 16,000 RMB (about $2,500) per square meter, roughly a third the cost of a typical apartment in central Beijing—the streets and houses remain lifeless. The owners, says Bianca Bosker, author of Original Copies: Architectural Mimicry in Contemporary China , are "dreaming of what they'll do with the riches they imagine they'll get when they one day sell them." The likely answer? Buy more property. However, "Given how many people have hatched the same 'get rich quick' real-estate idea, and how many of China's gated communities stand empty, betting on real estate looks increasingly risky."

Spring Legend is hardly the only city of its kind. There's also Thames Town, outside Shanghai, which is a $300 million British-style residential complex developed by since-incarcerated Shanghai Communist Party boss Chen Liangyu. And north of Beijing in Hebei Province is Jackson Hole, a wind-swept Wild West replica featuring neighborhoods called Moose Creek, Route 66, and Aspen Land. When developers previewed Jackson Hole in 2003, buyer interest was intense. The homes "sold out in record time," says Oregon-based designer Allison Smith, who helped create the settlement. Early investors who purchased an "American villa" for around a quarter-million dollars in 2006 have seen their dreams "triple in value," she estimates.

Jackson Hole bucks the trend: It is a living community, a mix of older families and retirees drawn by what Smith agrees is a serendipitous confluence of factors—co-operative developers, clever marketing, and a great location. But Smith fears there's a downside to the speculation. "At this point, the Chinese are in such a rush to buy everything, it may not hold its value down the line," she says. "Jackson Hole doesn't have that problem; people want to stay there.People want to live there. We've done something positive—it's not just for the money."

Not every fake European village is so successful. Luodian New Town , also known as North European New Town, is a development in Shanghai's suburban Baoshan district supposedly based on the historic Swedish town of Sigtuna.According to Bosker, "its foreign architects [Swedish firm Sweco] failed to take into account Chinese lifestyles or customs—specifically, the principles of feng shui." The developers at first banned any remodeling but, as homes failed to sell, they caved. On visiting, Bosker "found the neighborhood to be a mess of construction, as homebuyers eagerly carved up the houses to fix their feng shui."

Anting German Town, a failed experiment located about 20 miles outside Shanghai, is another example. "The [Chinese wanted] half-timbered buildings and medieval romance," Der Spiegel explained in a 2011 postmortem. "But the architecture firm Speer thought it knew better and built a modern German residential quarter [where] nobody wants to live." The truth, as the article admits, is more complicated than just aesthetics—the town lacked the life support of proper infrastructure.

"'Empty towns' and 'ghost towns' attract a lot of public attention, and that has a lot to do with the fact that these are local government initiatives and investments," says Pan Yingli, a professor of finance at the Research Center for Modern Finance at Shanghai Jiaotong University.

With taxes collected centrally and then redistributed to local governments, land has become the principle source of income for provincial officials, who normally can expect a redistribution of only 50 percent of fiscal revenue after paying 85 percent of the municipal purse, according to Pan. Grandiose land projects, thus, are a ripe moneymaking vehicle for officials. German houses are too dark-colored," Liu argues. "They look depressing."

"This creates bubbles, because the prosperity of properties and cities ultimately comes from the accumulation of people, but developing real estate alone doesn't create jobs—so [these new towns] don't attract laborers or their families. As a result, only the land per se is 'urbanized,' and so become the 'ghost towns' that we see."

As with many real-estate projects, the key to avoiding disaster relies on several things all going the developers' way: Connections must be well-maintained, oversight should ideally be avoided, local power structures must be preserved, and the infrastructure needed to breathe life into a remote, self-contained development has to be completed on time.

In the case of Anting, the problem seems to be more of an absence of the latter. A pleasant conurbation of ponds, green space, and wide boulevards, there is nothing about Anting that wouldn't necessarily appeal to Chinese buyers—a Shanghai city planner praised the concept as aesthetic and "well thought through"—but "the project failed because … the district is cut off and surrounded by industrial districts and wasteland." It was like a "foreign body," the city planner told Der Spiegel.

To China's more bearish observers, vacant cities are prima facie evidence of the country's overcapacity problem, with Ordos, a "ghost town" in Inner Mongolia, being the most famous example. But some economists reject this narrow interpretation.

"It's possible the 'ghost town' problem is exaggerated. China is a big country; different local governments have different governing styles and their leaders have different working abilities," says Pan Yingli. "Local governments borrow a lot of money [to build these towns] but [these towns don't create] the industries or population to produce enough fiscal income to pay them off.These debts become bad loans and add to the risks for the banks. And the banks' solution to this is to extend maturities—in other words, to lend them more money to pay off their old debts."

Stevenson-Yang attributes the faux-architecture phenomenon partly to "a lack of commercial drivers behind development … planners just pluck ideas from magazines." It's a description that Spring Legend's Liu would probably dispute. The decision to build Spring Legend in its unique style was carefully considered, he says, rather than a knee-jerk instinct to copy other successful copycats.

The original concept aimed to imitate ancient Chinese village designs, but thefeng shui didn't quite fit. "[It] required too much space and needed to be built along a river," Liu says. "We wanted to make use of the scenery and mountainous location and make the property blend in naturally." ("Bad feng shui can tank a neighborhood's prospects," warns Bosker.)

Hence the Alpine approach. The mix of styles and scenery, Liu says, was intentional. In China, "European architecture is largely symbolized," he observes. (This is especially true in historic cities like Tianjin, where Liu observed that "you see a lot of carriages being pulled by horses [and] that sort of thing").

The developers sent a team of around a dozen people to Europe, where they spent time in villages and towns. Their findings encouraged focus on "lifestyle" rather than authenticity, with Liu trumpeting "a relaxed style of living environment … the idyllic, rather than the aristocratic side of Europe." One of the few genuine shops was a small supermarket, selling typical, low-end domestic fare—duck necks, vacuum-packed chicken feet.

In Spring Legend, for example, you'll encounter plenty of benches—a piece of street furniture practically never encountered in Chinese cities—because "We wanted to encourage people to go out more.… [In China], people tend to stay in; in Europe, it's different," says Liu. But places to spend money are curiously absent—almost all the stores and bars are artificial. The Toy Shop, for example, has photographs of goodies plastered into its window, but peering through a broken pane reveals a concrete husk littered with debris—rubble, a bicycle, a workman's leftover lunch.

Businesses take time to prosper, argues Liu: "We didn't sell the storefronts to anyone yet, because we're afraid once we do so, it will be out of our control and low-end shops will pervade, which is not what we want." He may have a point.One of the few genuine shops was a small supermarket, selling typical, low-end domestic fare—duck necks, vacuum-packed chicken feet, potato chips, spicy tofu, beer, and frozen fish balls; items that probably don't fit Liu's 'brand.'

While the shops may not sell foie gras and fine Scotch yet, there are nods to different parts of high European culture all around, even though Europeans themselves are not permitted to purchase any of these properties. According to the town website, the large, swanky but deserted Elischer restaurant pays tribute to the Austrian town where Emperor Franz Joseph is supposed to have met Princess Sisi—in fact, the real town is called Bad Ischl . But that doesn't matter: The Spring Legend Holiday Hotel finally opened its doors two months ago to an impatient public and purports to be the "First Princess Sissy-themed [sic] hotel in Beijing"—an unproven (but perfectly credible) claim.

This unedited amalgam of different traditions and countries is deliberate, Liu explains: For mainlanders, at least, "it's enough to get their general approval of the style. They don't need the absolutely authentic experience." Indeed, the European dwellings of Spring Legend may boast a range of primary colors, but something they don't have is one that looks definitively European. That's because the real thing can come with apparent drawbacks. "Well, German houses are too dark-colored," Liu argues. "They look depressing."

Indeed, as China's confidence grows, the country might sour on foreign styles altogether. "Already, new developments are cropping up with traditional Chinese architecture as their theme," Bosker observes. "We might have reason to worry when China stops copying our architecture altogether."