China’s Ghost Cities

Video from SBS on China’s Ghost Cities
The interesting thing is that even in “communist” China, urban population growth is a self-reinforcing belief system system. If people believe that other people/firms will move there, they too will move there. If they believe it will fail, they won’t and it fails. Changing expectations is critical for success. The commitment game is crucial here, and hence there is an important role for urban entrepreneurs or prophets or boosters who sell cities.
Urban construction in China however is lacking a price feedback signal, since it is being funded by the communist government. “It is said there are around 64 million empty apartment in China” clearly these are mislocated with respect to demand.
See also about Ordos