In a world that is facing unprecedented increases in population and with larger and larger cities,
you could wonder... do cities have limits?
Well...
The truth, folks, is yes.
That’s why in some countries, they’re opting for a much more drastic solution than
usual.
I’m referring to the so-called “cities from scratch”.
But, what exactly are cities from scratch?
Well..., with “cities from scratch” we’re talking about cities created, constructed
and populated where there used to be absolutely nothing more than a vast expanse...of land
or sea.
Take for example Songdo, in South Korea.
Songdo, which was also turned into a Special Economic Zone, is one of the world's greatest
examples of what a city built from scratch should be.
A true example of success.
Because, some of the others didn’t do so well, and some were a complete failure.
But let’s pause for a second.
Some of you may be thinking that this is crazy, that it’s too expensive to build a city
from scratch, right?
Well, folks… you’re absolutely right.
China, for example, has used more concrete in the last three years than the United States
did throughout the 20th century.
But, why are so many new cities being built right now?
Is it just about offering more housing to the people coming from the countryside?
Or are there more reasons behind it?
Let's take a closer look.
(THE POWER OF CITIES)
Folks, it's a fact that power is concentrated in cities.
And I’m not only talking about political power, I’m also talking about economic power,
industrial power, artistic power, cultural power...
Cities are something of a cocktail of elements that lead to a prosperity explosion.
And it’s precisely beneath all that prosperity that we find the reasons to create new cities,
cities from scratch.
But, you may be wondering, where the hell are all these new cities being built?
Well... let's see, in Europe I can think of very few examples that fit.
In America there are some but they are on a smaller scale...
So...
Where can they be?
Any ideas?
Exactly, you got it!
Asia is the greatest proponent of new cities in the world.
And within Asia there’s one country that has taken it to the extreme.
China has built more than 600 cities from scratch since the Chinese Communist Party
came to power in 1949.
And not all of these cities were built with the same function in mind.
For example, some are centers of state or regional political power, others are oriented
towards logistics, others are technological, many others seek to be trade and finance centers,
and of course some are chiefly residential.
However, the bottom line is that the purpose of the city doesn’t really matter, they’re
all built with a common ambition: to be engines of long-term economic growth.
China plans to build new city nearly three times the size of New York.
The Guardian.)
Yes, we’re talking about an extreme case of urban planning... but market-targeted planning.
Which doesn’t necessarily mean it’ll go well… but we’ll see more of that a bit
later.
The point, folks, is that the relationship between cities and economic development isn’t
only being pursued by China, but also by other developing countries that are experiencing
a fiercel transfer of people from the countryside to the city.
Oh!
And I can already tell you that this is something we’ll be talking about in the future on
VisualPolitik.
Because it isn’t only happening in Asia.
In Africa, there are projects such as Eko-Atlantic in Nigeria, Hope City in Ghana, Konza in Kenya
or the New Administrative Capital – yes, that’s its name – in Egypt.
Of course, in order for this to be a success, we need to know how to build a city from scratch,
and for that we must take many important things into account such as location, water supply,
capital investment, public transport and waste management among many other things.
And let’s not forget to create a city identity within which people feel comfortable and integrated.
As you can imagine, all this is very expensive, that’s why not all the new cities have worked
as planned.
Even considering all the risk, new city fever is very common in several developing countries.
So, before we go on, we need to consider something:
Do all cities follow the same model?
Are they all driven in the same way?
Listen closely to the answer because it may surprise you.
(THE PARADIGM OF PUBLIC AND PRIVATE CITIES)
Yes folks, you heard that right.
Private cities
As with everything, there isn’t just one way of doing things, and therefore there isn’t
a single city management model.
Okay, it’s true, most new cities are driven and managed by the public sector, that is,
by the State, by governments ... But, folks, a small number of them have been created and
managed by the private sector.
And some more successfully than others.
But... let me ask you a question, what do you think are the main differences between
the two models?
When we talk about private cities, you may imagine a huge wall with security guards at
the doors controlling who can or cannot pass, or charging a fee for entry.
Well...
Nothing could be further from the truth.
Private cities are ordinary cities whose only peculiarity is that they have been designed,
built and later managed by one or more private companies.
That is, instead of receiving services from the public administration through the municipality
and taxes, these services are provided by private companies through a kind of general
service contract that the residents sign when they move in and that is paid annually.
Perhaps one of the best examples of this is Reston.
See, Reston is a private city in Virginia, in the United States.
It belongs to Fairfax County.
Founded in the early 1960s, it was conceived as a set of company-created owner communities.
And it more or less continues to be so to this day.
These communities have their own private security service, garbage collection and public transport.
And it looks like things have gone quite well…
The city has had a huge population growth.
Between 1970 and 1980 alone, the population skyrocketed from less than 6,000 to more than
36,000, a 536% increase in ten years.
Today more than 60,000 people live in Reston.
And it makes sense, Reston, for example, has been cataloged by a CNN study as one of the
best small cities in the United States to live in.
And that isn’t the only example…
Lavasa, in India, is a private city in development that will have an area of ​​100 square
kilometers and 300,000 inhabitants when completed.
Today it’s one of the best places to live in India thanks to its services.
In any case, we’ll need to see if this way of making cities takes off in the upcoming
years.
Because, the truth is, most cities don’t follow this private model.
And folks, let's not kid ourselves.
A new city being public or private doesn’t define its success or failure.
Several factors come into play to make cities as we want them to be: true hubs of growth
and prosperity.
And among them the most important one is urban planning, with a vision of the future, but
also remaining realistic and thinking about the people.
Well, there is a country where these basic concepts have gotten quite out of hand.
Listen up.
(THE DANGERS OF BECOMING AN ADDICT)
Cities, cities and more cities...
We told you at the beginning, China has a clear idea in mind: the future is in the cities.
But, to what extent?
When should a country say STOP, we don’t need more new cities?
Well... folks, the Chinese government doesn’t seem to want to see what the rest of the world
sees: that they have a problem, they’re going to need a lot of people to inhabit their
mammoth cities built from scratch.
China’s shrinking cities are still addicted to building despite population slump.
South China Morning Post.)
And, of course, building a city with everyone else's money leads to a huge illusion of economic
prosperity.
A lot of players become involved, and whole economic sectors continue to work thanks to
the new city’s construction.
For example, Chinese local governments have covered a lot of their budget for years thanks
to real estate developments in these new cities.
You see, in the year 2000, land sales accounted for 9.3% of municipal revenues in China.
Well... listen to this, in 2011, after more than 10 years of new city booms, this amount
reached a whopping 74.1% of total revenues.
Basically, they thought they’d found the goose that laid the golden eggs.
According to a joint survey done by Landesa, Renmin University and Michigan State University,
Chinese municipalities earned 40 times more money selling land for urban development than
they had paid to expropriate them.
And in the case of land reclaimed from the sea, this ratio could increase up to 100 times
more.
With these numbers, it doesn’t seem like bad business, right?
However, folks,hold on a second before we start ringing the bells.
On the one hand local governments spent all that money and much more building infrastructure
and projects of all kinds.
After all, it seemed like the money was always going to fall from the sky and when the apartments
were full of people... they’d get more and more money.
There was such euphoria that several local governments even ended up becoming developers.
Which led them to accumulate a huge amount of debt.
But, of course, this model is enormously short-sighted and is quickly losing ground in China.
Come on, if you extend the process too much... you’ll end up with dozens of completely
empty cities full of abandoned or half-built residential blocks because nobody is living
in them.
And forget about new taxes and all that.
Of course, the debt won’t disappear.
Well, that’s exactly what is happening.
As you can see in the graph, at the national level, the square kilometers built have already
surpassed the units of 10,000 people living in urban areas.
And 10,000 inhabitants per square kilometer is considered a good measure of population
density for the new Chinese cities.
Basically, this means that the rhythm of construction is already much quicker than the urban population
growth required to occupy those cities.
That is, the perfect recipe for building empty cities... or as they’re known in China,
ghost cities.
China local governments' hidden debt could total $5.8 trillion: S&P.
Reuters) October, 16, 2018
Folks, we could say that the local Chinese governments have been affected by something
like the Dutch disease, the curse of natural resources.
Although in this case, instead of natural resources, we have real estate promotions
financed and promoted by China’s own public banks.
Even so, Chinese President Xi Jinping has a very, very different opinion.
President Xi himself has promoted the construction of another new city from scratch.His personal
project, the New Area of ​​Xiongan, is an area 120 kilometers from Beijing that is
connected by a 20-minute trip from the Chinese capital by high-speed train.
Xi wants it to become a hub for the technology industry.
We’re talking about a completely ecological city for which so many trees are going to
be planted that the forest cover in the area will expand from 11 to 40%.
With all this, folks, we can assure you of something: China plans to continue building
new cities despite having many empty or clearly underpopulated ones.
So we must ask ourselves...
Will the Chinese new city bubble definitely explode?
And if so, how will this affect their economy?
We’ve already told you that one of China’s features is its enormous level of savings,
which may, indeed, finance all these...
Wasteful expenses?
But...
Is it really reasonable to waste soooo much money on cities that are often ending up empty?
Will real estate developers and banks go bankrupt?
What could happen to the global economy if this true addiction to building new cities
expanded to other developing countries?
Is it bread today and hunger tomorrow?
Leave your answer in the comments.
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