Ordos: Failure or Temporary Standstill?

After discovering large reserves of coal (one sixth of the total national reserves) at the beginning of the last decade in the desert of Inner Mongolia, the Chinese government began the construction of an industrial city destined to house a community of more than one million inhabitants: Kangbashi, in Ordos. In 2003, real estate companies who agreed to build houses, offices, and roads received the rights to mine coal in the area, a measure that helped enable the rapid growth of the city (which saw a 15% increase of the GDP in 2003).

But since then, falling coal prices combined with a general slowdown in the Chinese economy have threatened growth. City streets remain deserted and huge building complexes have yet to be occupied. Contractors testify that 70% of the projects will be suspended until further notice and banks have frozen most loans in the region. However, the government doesn’t give up and continues to invest in new infrastructure: 600 km of expressways are planned, 14 industrial parks, and 18 energy transformers. But despite all these initiatives, long and frequent payment delays do not encourage investors or manufacturers to take a chance on a city that remains, according to one informant, “an urban island”, empty and silent in the middle of the Mongolian dunes.