10 Cities Severely Affected by China’s Economic Downturn

Now, 95 percent of the companies have gone bankrupt and thousands of developers absconded and forfeited their loans. (Image: via  pixabay  /  CC0 1.0)
Now, 95 percent of the companies have gone bankrupt and thousands of developers absconded and forfeited their loans. (Image: via pixabay / CC0 1.0)

An article recently published by a mainland newspaper revealed that 10 cities are going to be severely affected by China’s economic downturn.

1. Erdos, Inner Mongolia

The city of Erdos in Inner Mongolia has the biggest coal-to-liquids complex outside of South Africa. The plant is owned by Shenhua Coal of China.

Erdos once accounted for nearly 70 percent of the total provincial coal output, and 50 percent of local revenue. This has created enormous wealth for the city.

Chasing high GDP growth, however, the authorities have built a high rise city that is completely empty, and looks like a modern ghost town. Such a huge waste of revenue.

2. Shenmu County, Shaanxi Province

Shenmu County was once of a major producer of coal. The local environment has been severely damaged due to many years of over-exploitation and disregard for the environment. Corruption is rampant, in particular, illegal fund raising.

According to The Quarter Economic Performance Analysis of Yulin City in 2013, only 7 local coal mines of the originally 99 are still in normal production. There has been a sharp decrease in engineering, logistics, and general commercial activities.

Only 7 local coal mines of the originally 99 are still in normal production. There has been a sharp decrease in engineering, logistics, and general commercial activities.

3. Yumen City, Gansu Province

Yumen is located on the Silk Road in Gansu Province, and is best known for its oil production.

The Yumen oil fields were the earliest producing wells in China; however, due to over-production, they have become minor producers. Corporate bankruptcies and a recession all led to a population migration, leading to a serious lack of consumption and motivation.

4. Huangshi, Hubei Province

There are no more mineral deposits in Huangshi, Hubei Province, where gold reserves once accounted for 88 percent of the known deposits there. Iron production once accounted for 23.7 percent of known reserves. There were also rich forest resources. Due to a lack of modern technologies and knowhow, there are serious signs of a pending decline.

5. Dongchuan, Yunnan Province

The “copper town” Dongchuan, Yunnan Province, is encountering problems. Once, its copper reserves ranked as the second largest in the country, but now, due to structural problems, it is losing its momentum as a major copper producer.

6. Jingdezhen, Jiangxi Province

This town is known as the “Porcelain Capital of China,” because it has been producing quality pottery for 1700 years. It is also a major tourism destination. Limited investment and the lack of modern management technologies are contributing to a decline in distribution and marketing its products. The decline has become obvious.

7. Changchun, Jilin Province

China’s “Motor City” is in Changchun, Jilin Province, in Northern China. The name Changchun means “Long Spring.”

Statistics show that car production declined in the first three quarters of 2013 by 17.2 percent compared to the year 2008. Jetta production was reduced, and production of the new Bora, Magotan, and Sagitar was discontinued. Production lines for the old Bora and Audi lines have been shut down.

8. Guangzhou, Guangdong Province

The automobile industry here is heading toward negative growth. Production value accounts for 45 billion yuan (US$7.35 billion). The Japanese dominated industry’s output fell by 6.3 percent.

9. Wenzhou, Zhejiang Province

Situated on China’s southeastern coast, Wenzhou’s climate is temperate. A number of labor-intensive light industries, such as footwear and clothing, developed here. Due to pressure from tightening monetary policies and wages, as well as rising production costs, operational difficulties are mounting. They are heading toward an inevitable crisis.

10. Hainan Province

Hainan Province is the largest Special Economic Zone laid out by Chinese Leader Deng Xioaping in the late 1980s. The name Hainan also refers to Hainan Island, the main island of the province.

The price of land has skyrocketed from only several hundred thousand yuan per mu (one mu = 0.16 acres) in 1991 to more than six million yuan per mu. More than 20,000 real estate companies emerged on this little island, which has a population of only 1.6 million.

Now, 95 percent of the companies have gone bankrupt and thousands of developers absconded and forfeited their loans. There are more than 600 incomplete and suspended building projects, more than 46 acres of land are idle and 80 billion yuan (US$13.1 billion) of building funds are frozen.

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