Oversupply

Read in ‘Ghost Cities of China’ (2015) of Wade Shepard:

Tomorrow I will give my yearly lecture in the bachelor study course ‘Perspectives on Amsterdam’ at the University of Amsterdam, theme: Political Economy. This time I will focus on the Zuidas (Southaxis) project, the new CBD of Amsterdam. Will it be successful? How much will it cost? Why build it? While preparing my lecture, I reread in ‘Ghost Cities of China’ about the building of CBD’s in Chinese cities. The American journalist Wade Shepard describes in the book how all the cities in China are developing their own Central Business Districts. Shanghai was first, with its Lujiazui business district in Pudong; Beijing in the north and Guangzhou in the south followed. Shepard writes that it didn’t stop there: many other Chinese cities started building their own versions of the Pudong model, also the very small ones. “Hence in 2014 the CBD is a near ubiquitous landmark in China’s cities.”

In 2003 the Ministry of Construction tried to get a handle on the CBD building boom. It was a problem, because building a CBD is a very expensive undertaking and might cost each city a fortune. But still it continues. Shanghai plans to have at least even three CBD’s on the east, west and south sides of its urban core, while Beijing envisions four CBD’s. Of course, the model was borrowed from the West. Paris, London, New York all built their CBD’s in the recent past. But the USA has only two: New York and Chicago. All the Chinese cities though hope to become a financial hub of their own region, or even the entire country. Shepard concludes that all those CBD’s are now so common that it is necessary to have one just to keep up. And of course only the business districts in the two biggest cities are prospering. The vacancy rate in many provincial cities is now more than 40 percent. Still, many more will get build in the near future. Shepard: “So it is clear that China’s CBD oversupply can only get a lot worse.” Almost the Dutch VINEX-model, I would add, with every provincial city building its ‘Central District’ near the railway station. Meanwhile, with Amsterdam’s Southaxis competing with La Défense, Paris, and Canary Wharf, London.