Underoccupied developments in China

Underoccupied developments in China are mostly unoccupied newly built property developments in China, and frequently referred to as "ghost cities" or ghost towns. The phenomenon was claimed and recorded as early as 2009 by Al Jazeera's Melissa Chan and subsequently reported by news media over the decades. Although a feature of discourse on the Chinese economy and urbanization in China in the 2010s, many developments that were initially criticized as "ghost cities" in China have since become occupied and are now functioning cities.
Additionally, the large-scale construction of underoccupied developments has raised concerns about environmental impact, including carbon emissions, resource depletion, and land degradation. Studies have shown that unused housing contributes significantly to China's residential sector emissions, counteracting national efforts to reduce carbon footprints.
Media outlets often label underoccupied development areas in China as "ghost cities" or "ghost towns". However, the two terms are technically misnomers, as they traditionally describe previously inhabited places that became abandoned due to economic decline, whereas many underoccupied developments in China are newly built and have yet to receive significant residential occupation.
Additionally, some reported cases of "ghost cities" are not independent administrative entities but rather districts built in the suburban regions of functioning cities to provide accommodation for a growing urban population.
A more precise measure of underutilized urban housing is Housing Utilization Efficiency (HUE), which refers to the ratio of actual residents to the total housing capacity within a given area. Studies have shown that underutilization is far more common than complete vacancy, with China’s national HUE declining from 84% in 2010 to 78% in 2020, indicating a growing trend of inefficient housing use. This distinction highlights that many so-called "ghost cities" may not be entirely vacant but rather suffer from low occupancy rates and inefficient urban planning.
The "ghost city" narrative around Chinese urban development first emerged in Ordos Kangbashi. In 2009, Al Jazeera journalist Melissa Chan reportedly came across the newly built Kangbashi district during a separate assignment. Though approximately 30,000 people already lived in the area, she described it as "empty" and labeled it a ghost town. This narrative quickly spread through international media, fueling Western skepticism about China’s economic growth and prompting critics to question the country’s GDP figures, suggesting its rapid development was exaggerated or unsustainable.
However, as noted by author Wade Shepard in Forbes, these early reports failed to consider that Kangbashi was just five years old when Chan visited. Wade argued that building a large urban district and achieving partial occupancy in half a decade should be viewed as a significant accomplishment, particularly when compared to infrastructure projects in Western cities, which can take decades to complete. Despite this, Kangbashi’s rapid growth was dismissed as an overreach rather than appreciated for its scope and pace. From the beginning, Shepard argued, the ghost city label was a simplistic and misinformed perspective. He also pointed out that in 2017, the "ghost city" label had become increasingly hard to apply to Ordos Kangbashi district as it had since further significantly increased its resident population from 30,000 to 153,000 people living there.
Shepard also explained how property values are structured in China plays a role in the creation of underoccupied new developments. "Economically affordable housing" must be lived in by the owner, and can not be bought and sold as an investment. The developer is only permitted to sell "economically affordable housing" at 5% over the cost of construction. By contrast, "commodity housing" can be bought and sold as an investment. Because housing is a physical object, and China's large population guarantees an ongoing demand for housing, commodity housing is considered a more secure way to store money. Except in some Tier 3 and Tier 4 cities, which have different government regulations, "commodity housing" generally sells as an investment. In addition, these homes typically serve as future homes for the buyer's offspring to live in when they get married.
In 2015, photographer Kai Caemmerer observed the unique approach to urban development in China, where cities are first being constructed to a near-complete state before residents are mass introduced, in contrast to the incremental growth typically seen in U.S. cities.
In a 2021 Bloomberg article, Max Woodworth, an associate professor of geography at Ohio State University, noted that China had experienced significant underurbanization for many years and is now rapidly addressing this issue. Woodworth explained that in 1978, only 18% of China's population lived in urban areas; by 2020, this percentage had increased to 64%. Woodworth indicated that the Chinese government aims to sustain the momentum of urban migration. With strict limits on new arrivals in Beijing and Shanghai, the development of new population centers has become increasingly vital. To enhance urban vitality, the government often facilitates the relocation of government offices and state-owned enterprises to these cities, followed by the establishment of public buildings, schools, and high-speed rail stations, which subsequently attract private investment.
In 2021, Business Insider, reported that in 2020 China had about 65 million empty homes. In the article, academic Xin Sun said in China there is a strong popular belief that real estate is the best way for preserving and generating wealth, leading to great demand for buying property; something the government encourages. The Economist reported that in some areas demand for property greatly outstripped supply, typically in cites. However, at the same time in poorer rural areas few people were buying properties, and in those areas there was a glut of empty houses.
Bloomberg also reported in 2021 that numerous cities including Zhengzhou and Ordos, that had previously been criticized as "ghost cities" in 2010s, have begun to fill up and "stir to life" and become functional cities, and suggested that "China is playing a very long game” when it came to urbanisation.
In 2015, Wade Shepard, author of Ghost Cities of China, criticized the "ghost city" term for focusing too much on the short term results, or "calling the game at halftime". A common assumption by foreign media is that local officials are strictly incentivized to start construction on this newly created urban land to boost GDP growth and look good within the Party. However, Shepard points out that many places which started becoming ghost cities were under the jurisdiction of an area with already strong GDP growth. He argues that these developments are seen as an investment for the future and promote development with timescales of over 20 years.
Ordos Kangbashi is often seen as one of the first and most prominent examples of the international Chinese ghost city phenomenon and fascination. Some journalists have pointed to the Ordos Kangbashi ghost city stories as an example of media hastily and often misinformed reporting of developments in China. Such reporting may not convey the perspectives of local officials and experts, and may seek to attract readers unfamiliar with China’s development model and bemused at China's perceived backwardness. As of 2015, it was reported that Ordos Kangbashi has a population of 100,000 people, 80 percent of which are full time residents, with the remainder commuting daily from nearby Dongsheng for work.
Circa 2016, Chicago-based photographer Kai Caemmerer investigated and noted the discrepancy between the news reports and actual situation. He noted, "Many of these new cities are not expected to be complete or vibrant until 15-20 years after they begin construction."
Many developments initially criticized as ghost cities did materialize into economically vibrant areas when given enough time to develop, such as Pudong, Zhujiang New Town, Zhengdong New Area, Tianducheng and malls such as the Golden Resources Mall and South China Mall. While many developments failed to live up to initial lofty promises, most of them eventually became occupied when given enough time.
Reporting in 2018, Shepard noted that "Today, China’s so-called ghost cities that were so prevalently showcased in 2013 and 2014 are no longer global intrigues. They have filled up to the point of being functioning, normal cities".
Writing in 2023, academic and former UK diplomat Kerry Brown described the idea of Chinese ghost cities as a bandwagon popular in the 2010s which was shown to be a myth.
China's urban expansion model has also been applied beyond its borders, particularly through the Belt and Road Initiative (BRI), which has promoted large-scale real estate and infrastructure projects in other countries. Some of these developments, although located outside China, have faced similar challenges of underutilization, financial instability, and environmental concerns.
Located in Malaysia, Forest City is a $100 billion urban megaproject developed by China’s largest private property developer, Country Garden, as part of the Belt and Road Initiative (BRI). The city was envisioned as a luxury, smart city spanning four artificial islands, designed to house 700,000 residents and position Malaysia as a regional economic hub. However, as of 2023, only 15% of the city had been built, and only 1% of its projected population resided there. Despite claims that 80% of completed apartments had been sold, low occupancy rates have led to concerns that the project remains largely uninhabited. The development has also faced significant financial difficulties, with Country Garden defaulting on nearly $200 billion in debt, leading to construction delays.
Critics have noted that Forest City was primarily marketed toward wealthy Chinese investors and foreign buyers, rather than local Malaysian citizens, contributing to its lack of appeal among domestic buyers. Capital controls imposed by China have limited overseas real estate investment, further reducing demand from Chinese buyers. Malaysia's shifting political stance on foreign ownership of housing has also created uncertainty about the long-term viability of the project.
Additionally, environmental concerns have been raised over the impact of land reclamation on marine ecosystems and the surrounding crocodile-infested waters that make certain areas unsuitable for recreational activities.
The large-scale construction of urban housing in China has led to significant carbon emissions, particularly from underoccupied developments. Between 2001 and 2020, China constructed 11.47 billion square meters of urban housing, accounting for nearly half of the world’s new housing stock. However, a substantial portion of these buildings remains unused, contributing to ongoing environmental concerns and energy inefficiency.
As of early 2021, an estimated 17.4% of the housing stock built between 2001 and 2018 in urban China remained vacant. The construction and operation of these unoccupied homes resulted in 28.26 million tons of CO₂ emissions in 2020, representing 4.3% of the total carbon footprint of the Chinese residential sector. These emissions offset 19.7% of the total carbon reduction achieved through China's primary residential decarbonization polices.
Despite ongoing urbanization, the volume of newly built housing has remained consistently high, leading to an oversupply of residential units in many regions. Many third-tier and fourth-tier cities in China have particularly high vacancy rates, exacerbating energy inefficiency and resource misallocation.
The presence of large numbers of unused apartments and buildings requires ongoing energy consumption for security, maintenance, and climate control, further contributing to avoidable carbon emissions.
The carbon footprint of underoccupied housing is particularly significant in some cities. For example, in Xi’an, the vacancy rate was estimated at 24.5%, with 0.78 million tons of CO₂ emitted in 2020 due to the construction and operation of unused housing. This accounted for 10.6% of the city's total residential carbon emissions.
Additionally, housing oversupply has led to inefficient urban expansion, particularly in suburban and newly developed districts, where population growth has not kept pace with housing construction. Studies show that older central districts tend to have lower Housing Utilization Efficiency (HUE), while new suburban developments often remain underpopulated despite large-scale infrastructure investments.
If the current vacancy rate were reduced by half by 2030, China’s residential sector carbon emissions could be cut by 9.0%. Additionally, the existing volume of unused housing could accommodate 24.19 million urban residents or 6% of the total urban population in 56 major cities.
Rather than continuing to construct new residential developments, urban planners and researchers have suggested that efficiently utilizing existing housing stock could significantly contribute to China's carbon neutrality goals while reducing resource waste and environmental impact. Potential solutions include:
The concept of Housing Utilization Efficiency (HUE) has been introduced to measure the extent of underutilization in urban housing stock. HUE is defined as the ratio of actual population to total housing capacity, providing a more comprehensive indicator of urban inefficiency beyond simple vacancy rates.
Between 2010 and 2020, China's national HUE declined from 84% to 78%, reflecting a significant increase in underutilized housing. The issue is particularly pronounced in third-tier and fourth-tier cities, where oversupply has resulted in lower occupancy rates despite continued housing construction. Unlike the widely reported phenomenon of "ghost cities," where entire urban areas appear unoccupied, HUE data suggests that many cities experience partial underutilization, where large sections of housing remain underused rather than fully vacant.
This underutilization has direct environmental consequences. The continued construction of housing, despite existing oversupply, leads to increased carbon emissions from cement and steel production. The annual oversupply of housing rose from 10% to 20% after 2011, contributing to inefficient land use and unnecessary resource consumption. Addressing underutilization through better urban planning and improved housing policies could reduce waste and contribute to China’s long-term sustainability goals.