By: 永久浪客/Forever Vagabond

About an hour drive away from the Sino-Singapore Tianjin eco-city is another eco-city development called Caofeidian. Caofeidian was launched in 2003 with the blessing of then Chinese President Hu Jintao. It was supposed to house 1 million residents.

Thirteen years later, pedestrians are seldom seen in the central business district of Caofeidian and cars are equally rare on its four-lane roads, according to an SCMP report in Jun this year. Unfinished buildings, mostly locked up, and abandoned hotels and commercial blocks, are a common sight in Caofeidian, even in the centre of town.

What has happened is that its investment and construction boom ended abruptly in recent years, leaving behind all these unfinished buildings and massive debts. “The rise and fall of Caofeidian can be viewed as a case study of China’s disordered investment boom,” noted the SCMP reporter.

The construction boom hit the wall in 2012 when China’s overall economic growth started to lose steam. Overcapacity in manufacturing sectors became increasingly problematic.

Many investors in Caofeidian dumped projects as funding broke down – economists estimate the bad loans involved amount to hundreds of billion of yuan – and the town became one of China’s biggest half-finished “rotten-tail” projects or “ghost cities”.

IMF estimates that China’s total debt burden equals 225 per cent of its GDP, with the potential losses on the Chinese banks’ corporate loans equal to 7 per cent of GDP.

A worker in Caofeidian commented, “Unless the central government treats Caofeidian like it did Shenzhen decades ago, Hebei, by itself, is unable to boost Caofeidian. It has no money and it also needs to develop Shijiazhuang [the provincial capital] and other cities.”

Caofeidian’s officials are now pinning their economic hopes on a regional synergy plan, focusing on logistics and the green economy to attract companies, new investments and people to the city.

Sino-Singapore Tianjin eco-city

The Sino-Singapore Tianjin eco-city, on the other hand, is funded by the deep-pocket Singapore government.

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Launched in 2007, it is slated to be the second flagship government-to-government project between Singapore and China following the China-Singapore Suzhou Industrial Park which started in 1994.

According to NLB information, the project was mooted by then Senior Minister Goh Chok Tong when he met then Chinese premier Wen Jiabao on 25 Apr 2007. Wen then agreed to Goh’s suggestion in principle and quickly moved to implement the idea, resulting in the signing of a framework agreement by Wen and PM Lee in Nov, 7 months later.

A 30 sq km site 40 km from the Tianjin city was selected. The Tianjin eco-city was projected to cost about S$9.7 billion. On 28 Sep 2008, construction of the eco-city commenced with a ground-breaking ceremony officiated by Goh and Wen.

Targeted for completion over 10 to 15 years, the Tianjin eco-city is planned to support a population of 350,000.

However, according to a recent report from Worldcrunch, quoting its source from French mainstream newspaper Le Monde, presently only 30,000 or less than 10% of the targeted residents live in the eco-city. This is 8 years into the development, not too far from the completion targeted timing.

But the Tianjin eco-city’s officials insisted that “more and more newcomers are arriving”.

Le Monde also reported that interest from the business community has also been less than hoped for. The city’s economic business park, which was supposed to house animation studios, is still empty.

S$16 to 20 billion already spent?

The cost of the whole eco-city project has greatly exceeded expectations. Between 80 and 100 billion yuan (S$16 to 20 billion) have already been spent, according to Le Monde. If this is true, that means the amount spent has immensely exceeded the original projection of S$9.7 billion and the project has yet to be completed. Le Monde reported that the final bill “should climb to 230 billion yuan (S$46 billion)”, citing the Tianjin eco-city’s officials.

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In this regard, the opposition party need to question the ruling PAP government on the actual amount of investments that have thrown into the Tianjin eco-city project thus far. After all, all these investment monies belong to the Singapore public.

Meanwhile, the eco-city is resorting to selling housing at a discount or giving a “market subsidy” to buyers in order to attract more residents to the city.

Zhang Meijie, along with her husband and two children, are among those who opted for Tianjin eco-city, Le Monde reported.

“The day nurseries seemed high-quality and the setting more wooded,” the stay-at-home mother explains. But the real decider, for Zhang Meijie, is that housing was subsidized. As such they were able to get their apartment below market cost. But the husband would need to commute an hour to work each way as he works outside the eco-city.

“Tianjin Eco-city residents double in a year despite ‘ghost city’ fears”

CNA, one of Singapore’s state media, downplayed the fears that Tianjin eco-city will turn into another “ghost city”. It published a report last month ahead of PM Lee’s NDR speech which talked about Singapore embarking on 3rd Sino-Singapore joint venture at Chongqing.

The CNA report said, “One of China’s best known eco-cities, the Sino-Singapore Tianjin Eco-city, has started filling up, eight years after it was launched.”

“While there were fears that the development may join the ranks of China’s ‘ghost cities’, home sales for the project have gone up substantially this year. The number of residents has also more than doubled in just a year,” CNA boasted.

While Le Monde put the number of residents in the eco-city at about 30,000, CNA said the number is 50,000. Even at 50,000, this is less than 15% of the targeted 350,000. But CNA said the targeted number is supposed to be reached by mid 2020s or some 10 years from now.

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“Development and showcasing”

Peng Zhengyang, the research director of the Tianjin eco-city, says that some 600 areas in China have labelled themselves as “eco”, though most do not respect rigorous criteria.

At first, the trend was both exciting and promising. Over time, however, it became clear that many of the ventures weren’t viable because of “the excessiveness of the projects, the gigantic economic costs, the stamping of environmental labels for form and with no convincing results, and the absence of any social approach”, a French urbanist told Le Monde.

The urbanist went on to say that, ironically, many projects that do not claim to be “eco” turn out to be more sustainable because they take into account the local context, the climate, the geography or the history.

“The rampant building that goes on in Chinese cities outpaces the immediate needs. It’s excessive, in other words. Urban populations are growing fast. But city structures are sprouting up faster still,” Le Monde reported.

The website, The Paper, citing information presented in recent conference organized by the ministry of housing, notes that on average, each provincial capital has 4.6 “new districts”, artificial extensions of cities where low-rise blocks are sprouting up everywhere and spread out over dozens (or even hundreds in some cases) of square kilometers. The situation, as one Shenzhen urban planning committee member described it, “is out of control”.

Would Tianjin eco-city be eventually filled with the targeted 350,000 residents or would it become yet another “ghost city”? Only time will tell.

In the mean time, there is little chance that Tianjin eco-city will become another Caofeidian as long as the Singapore government continues to “invest” Singapore’s public monies into it. Constructions will continue. Buildings will not be left unfinished and no massive debts are incurred, unlike the situation in Caofeidian.