It was billed as China’s Dubai: A cluster of sail-shaped skyscrapers on a man-made island surrounded by tropical sea, the epitome of an unprecedented property boom that transformed skylines across the country.
However, prices on Phoenix Island, off the palm-tree lined streets of the resort city of Sanya, have plummeted in recent months, exposing the hidden fragility of China’s growing, but sometimes unbalanced economy.
A “seven star” hotel is under construction on the wave-lapped oval, which the provincial tourism authority proclaims as a “fierce competitor” for the title of “eighth wonder of the modern world.”
However, the island stands quiet aside from a few orange-jacketed cleaning staff, with undisturbed seaside swimming pools reflecting rows of pristine white towers, and a row of Porsches one of the few signs of habitation.
Chinese manufacturers once snapped up its luxury apartments, but with profits falling as a result of the global downturn many owners need to offload properties urgently and raise cash to repay business loans, estate agents said.
Now apartments on Phoenix Island which reached the dizzying heights of 150,000 yuan (US$24,000) per square meter in 2010 are on offer for just 70,000 yuan, local estate agent Sun Zhe said.
“I just got a call from a businessman desperate to sell,” Sun told reporters, brandishing his mobile phone as he whizzed over a bridge to the futuristic development on a electric golf cart.
“Whether it’s toys or clothes, the export market is bad ... property owners need capital quickly, and want to sell their apartments right away,” he said. “They are really feeling the effect of the financial crisis.”
Official figures showed an almost 8 percent increase in China’s total exports last year, but sales to Europe fell by almost 4 percent with the continent mired in a debt crisis and recession.
At the same time rising wages in China mean that producers of clothes, toys and other low-end goods are seeing their margins squeezed as other emerging economies compete to become the world’s center for cheap manufacturing.
For years Chinese business owners, faced with limited investment options and low returns from deposits in state-run banks, have used property as a store of value, pushing prices up even higher in the good times, but creating the risk of a crash in the bad.
“China had a lending boom ... and so if people are using property as a place to stash their cash, they had more cash to stash,” said Patrick Chovanec, a professor at Beijing’s Tsinghua University. “At some point they want to get their money out, then you find out if there are really people who are willing to pay those high prices.”
Phoenix Island is part of Hainan, a Belgium-sized province in the South China Sea that saw the biggest property price increases in China after a 2008 government stimulus flooded the economy with credit.
Eager buyers camped out in tents on city streets as prices shot up by more than 50 percent in one year.
However, tightened policies on access to credit and multiple house purchases have since knocked values in favored second home locations, even while prices in major cities they have rallied in recent months.
Real estate is a pillar of the Chinese economy, accounting for almost 14 percent of GDP last year and supporting the massive construction sector, making policymakers anxious to avoid a major collapse of the property bubble.
At the same time ordinary Chinese who cannot afford to buy a home have been frustrated by high housing costs for years.
With anger over graft also mounting, state media have carried several reports in recent weeks about corrupt officials’ property holdings, including a policeman who used a fake identity card to buy at least 192 dwellings.
Hainan’s tropical shores are said to be a hotspot for purchases by well-connected bureaucrats, but estate agents denied they were rushing to sell off apartments for fear of a crackdown.
Officials only account for around 20 percent of owners, they said — while doubting any new regulations would be properly enforced.
“There are always different rules for people with connections,” said one agent, asking to remain anonymous.
It is an example of the multiple competing interests the authorities have to balance, leaving them treading a difficult line, with sometimes unforeseen consequences.
On the other side of Hainan, at the Seaview Auspicious Gardens, which boasts beachside villas accessed by artificial rivers and a private library containing 100,000 books, prices have fallen by a third from a high of 12,000 yuan per square meter in the last year, and a third of the flats remain unsold.
Yang Qiong has a thankless task as one of its saleswomen.
“Before the government restrictions we would sell out a development like this in just five months,” she lamented.
Taiwan’s fall would be “a disaster for American interests,” US President Donald Trump’s nominee for undersecretary of defense for policy Elbridge Colby said at his Senate confirmation hearing on Tuesday last week, as he warned of the “dramatic deterioration of military balance” in the western Pacific. The Republic of China (Taiwan) is indeed facing a unique and acute threat from the Chinese Communist Party’s rising military adventurism, which is why Taiwan has been bolstering its defenses. As US Senator Tom Cotton rightly pointed out in the same hearing, “[although] Taiwan’s defense spending is still inadequate ... [it] has been trending upwards
There is nothing the Chinese Nationalist Party (KMT) could do to stop the tsunami-like mass recall campaign. KMT Chairman Eric Chu (朱立倫) reportedly said the party does not exclude the option of conditionally proposing a no-confidence vote against the premier, which the party later denied. Did an “actuary” like Chu finally come around to thinking it should get tough with the ruling party? The KMT says the Democratic Progressive Party (DPP) is leading a minority government with only a 40 percent share of the vote. It has said that the DPP is out of touch with the electorate, has proposed a bloated
In an eloquently written piece published on Sunday, French-Taiwanese education and policy consultant Ninon Godefroy presents an interesting take on the Taiwanese character, as viewed from the eyes of an — at least partial — outsider. She muses that the non-assuming and quiet efficiency of a particularly Taiwanese approach to life and work is behind the global success stories of two very different Taiwanese institutions: Din Tai Fung and Taiwan Semiconductor Manufacturing Co (TSMC). Godefroy said that it is this “humble” approach that endears the nation to visitors, over and above any big ticket attractions that other countries may have
A media report has suggested that Chinese Nationalist Party (KMT) Chairman Eric Chu (朱立倫) was considering initiating a vote of no confidence in Premier Cho Jung-tai (卓榮泰) in a bid to “bring down the Cabinet.” The KMT has denied that this topic was ever discussed. Why might such a move have even be considered? It would have been absurd if it had seen the light of day — potentially leading to a mass loss of legislative seats for the KMT even without the recall petitions already under way. Today the second phase of the recall movement is to begin — which has
RSS