The skyline of Yujiapu in the Chinese city of Tianjin looks more like an expensive, abandoned movie set than it does “China’s new Manhattan,” as the financial district was once billed. A patina of dust covers the glass doors of the 47 office buildings and hotels that still sit empty, and in come cases unfinished.
This Manhattan-style ghost city on some of the best real estate in Tianjin, a port city just south of Beijing, is a victim of China’s investment boom—and, as is increasingly apparent, its bust. Tianjin has led the debt bonanza of the last five years, loaning out money faster than anywhere else in China since the financial crisis hit in 2009.
Much of the construction ceased back in 2010, and the deserted avenues left behind reflect the reckless borrowing of local-government financing vehicles (LGFVs)—companies created by city and provincial governments to borrow cheaply from state-owned banks to fund prestige-boosting infrastructure projects.
This is where crony capitalism always — always — leads.