THE INSTA-CITY IN INNER MONGOLIA
World Policy Journal Winter 2010-2011
BY ELIZABETH POND
KANGBASHI, Inner Mongolia, China — At first sight, this remote outpost in Inner Mongolia looks like a mirage on the windswept, semi-arid desert. It has all the accessories of a real city. The planners have thought of everything–a grid of six-lane roads, an opera house, a theater, a brown, potato-shaped museum, a library that looks like a stack of toppling books, a convention center, a stadium that hopes to host the Asian Games and a central square even larger than Beijing’s Tiananmen and, thus, ideal for flying kites. There are also enough high-rise apartments to house the one, or two, or maybe 5 million people who are expected to live here in one, two, or maybe five years. All that might distinguish this city from scores of others in rapidly modernizing China are the outsized statues of Genghis Khan and rearing stallions.
What’s missing, so far, is people. At mid-day, Kangbashi’s purported 30,000 citizens are scarce. Its six-lane streets are empty. Here, amid the fastest urbanization in history, which has catapulted China’s city-dwelling population from 17.5 percent to 47 percent in a single generation, the great migration appears to be stuttering.
Zhang Penglong explains the paradox. If the gigantism of six-year-young Kangbashi shows the top-down face of China’s emergence as the world’s second largest economy, 29-year-old Zhang shows the face from bottom-up. “Allen,” as he likes to be called by English speakers, is the new yuppie–a first-generation university graduate and the first from his family to move from the village to the city. Now, Allen has to figure out, as a newlywed, how to navigate his way in this strange new world. He’s a good interpreter of the Inner Mongolia Autonomous Region. He sees things from both inside and out.
Allen attended university in the regional capital of Hohhot and settled down there. He therefore looks at the surreal Kangbashi and its founding fathers in surrounding Ordos Township with the eyes of a man from the capital. Yet he is also a seventh-generation Inner Mongolian. His forebears came here 200 years ago, from land-poor Shanxi Province. He is part of the nearly 80 percent Han Chinese ethnic majority in the region. His parents still tend their sheep in a nearby mountain village after they balked at moving to inferior housing on the plains, during a recent campaign to halt grazing on eroding hillsides. Allen’s introductory tour for a visitor is brief. “There are 15 Bentleys in Ordos,” he declares.
Indeed, Inner Mongolia as a whole has already made its own ascent out of poverty. Today it is China’s only inland province with a per capita GDP matching that of the bustling Hong Kong-Shanghai corridor. And the Ordos tycoons, who created the instant city of Kangbashi—which is no self-governing municipality, but only a district of Ordos—have risen even faster.
Blessed by coal mines and the rare earth minerals that the world craves for its mobile phones, hybrid cars, and missiles, Ordos tops the Inner Mongolia pecking order, with a per capita GDP that locals say exceeds even Beijing’s. “Rare earth,” Allen clarifies, “is the monosodium glutamate of high-tech industry. If you add it to steel, it makes the steel strong. It makes a cellphone vibrate. It’s important for aiming rockets to outer space.” The rare earth Neodymium, used in everything from wind-turbines to iPhones, is mined here, as is the extremely profitable Lanthanum— which sells for more than $45,000 a ton on the international market, and just $4,500 a ton within China.
So, of course, as night follows day, the Ordos millionaires built a new city. They had loose change left over from the export of close to 80 percent of the rare earths that China produces—accounting for 97 percent of the total produced globally. Instead of stuffing their aggregate billion dollars or so into a mattress, they put it into Kangbashi—their trophy and investment. Nor are they resting on the laurels of coal, lanthanides and a skyscraper city conjured up from the steppe. Whatever their past profits in a region that produces a sixth of the nation’s coal, the Ordos fathers can hope too that by the time Kangbashi gets into full swing, renewable energy will be curbing China’s voracious appetite for smog-inducing coal. Already, China is the world’s largest producer of solar panels. And Inner Mongolia’s 2010 jump in capacity nudged China past the United States to become the world leader in harvesting windpower.
“Here the wind blows twice a year,” Allen deadpans, “and each time it lasts for six months.” He adds that Inner Mongolia is just starting to manufacture its own turbines and blades. Traditional American, German and Danish suppliers are bracing themselves for the competition.
To be sure, generating surplus electricity in the sparsely populated north is still uneconomical, as there is no transmission grid in place to carry it to the energy-hungry factories in the southeast. Yet proof of the seriousness of the Chinese quest can be seen every day on local highways, in trucks loaded with generator parts—and even in the $1,500 mini solar panels and wind turbines that perch on the top of each streetlight along expressways still under construction.
The Golden Goose
In the Chinese context, the notion that if you build a city in the wilderness, people will flock to it, is not at all far-fetched. If Dubai could become the glittering entrepôt on the Arabian sands, why couldn’t Kangbashi become the glittering entrepôt on the fringes of the Gobi? If legendary Shenzhen could expand from a tiny fishing village near Hong Kong to become, in just 25 years, a metropolis of 14 million and the nation’s third-busiest container port, then why couldn’t Kangbashi partake equally of China’s stunning growth? If Beijing is now building a chain of inland factories and cities to spread the country’s coastal prosperity to the hinterlands (and gain from a new pool of low wage factory workers even as strikes begin doubling labor costs in Guangdong), why couldn’t Kangbashi too become a trailblazer?
After all, Kangbashi’s pattern follows the recent model of every self-respecting Chinese city. As many as 200 million young migrant workers have already breached the half-century-old barrier of residence registration—hukou—that previously blocked second-class peasants from drifting into cities. Their target factories and cities have been hard pressed for the funds to expand housing, transport, sewerage and other infrastructure to accommodate this “floating population.” Tax revenues in a transforming and frenetically improvising system have not kept up with budgetary needs—but cities have discovered the golden goose: land.
Land is owned by the government. Therefore it can be exploited easily by city governments, either by buying out contiguous rice paddies cheaply from gullible long-lease farmers, or by outright confiscation. In the latter case, since the central government has barred all property suits from the courts at present, compensation is often determined by the loudness of protests and by the effectiveness of holdout lessees in appealing over the heads of local officials to persuade higher provincial or central authorities that there is a risk of dreaded “instability” if buyout offers are not sweetened.
Once land has been acquired, there is virtually no financial risk, at least so far. In an economy that has been growing relentlessly at an average of almost 10 percent for 30 years, real estate and rental prices have gone in only one direction—up. Nor is there much political risk. The Communist Party still maintains national political control, but it practices administrative decentralization. It encourages various cities to experiment with local governance, in what some westerners deem a search for the functional equivalent of democratic dissent in keeping policies honest. After a few years the party draws conclusions and modifies national best-practice campaigns accordingly.
Moreover, the Ordos grandees could trust that their personal connections with Beijing elites would guarantee links between their infant city and the bullet-train and divided-highway network now spreading across Inner Mongolia. On this topic, Allen points out the shrewdness of widening the “median” between the parallel one-way strips of highway to several hundred meters, to discourage southbound drivers from veering into northbound lanes against the flow whenever they encounter traffic jams. Last summer such behavior by China’s rookie drivers contributed to the spectacular 11-day, 50-mile gridlock of bumper-to-bumper coal trucks on the Baotou-Beijing route.
Finally, Ordos investors were not bothered by having to invent some new public relations approach that would justify their pet project within the grand narrative of China’s 21st-century return to world history. That was ready-made. All the potato-shaped Kangbashi museum would have to do, once its doors opened, would be to pick up the well-polished stories in the nearby mausoleums of Genghis Khan and of the renowned Chinese beauty Wang Zhaojun. In these accounts, the many battles with Mongol and Turkic tribes that led the Chinese to build the Great Wall against the northern marauders are muted. The meeting of the Han and the tribesmen is portrayed essentially as a forerunner of international peace—especially after Wang Zhaojun, the paragon among Emperor Yuandi’s concubines, agreed to become the queen of Xiongnu Chieftain Huhanye to ensure tranquillity between the two peoples for the next 60 years.
In this retelling, even Genghis Khan’s 13th-century conquest of four-fifths of the then known world redounds subliminally to the greater glory of the Chinese. And it finds echoes in the 1950s offer by the Mongolian nomads to contribute their western grazing lands to become the campus for China’s nascent space program. Already in Kangbashi’s statuary, the tough little ponies that propelled the mobile Mongol archers to the very gates of Hungary have become huge rearing stallions. The city fathers are savvy in embracing this heroic version of civic history.
To be sure, there would be an environmental downside to such monumental urban construction. Kangbashi straddles the ever-shifting line between the cornfields to the south and the grasslands to the north—between China’s watered southeast and arid northwest. The loess is fragile, as all the fresh arroyos show. Already desertification and erosion, and to a lesser extent overgrazing by cashmere goats, have devastated more than 1 million square miles of rangeland. All the poplar and willow saplings planted by soldiers along the highways in the government’s massive reforestation drive have done little to stem the encroachment.
Urbanization and rising living standards will only make new demands on the scarce water that remains. The aquifers are dropping. Together, Kangbashi and Hohhot and Baotou could soon reduce the Yellow River to a seasonal trickle. Dust storms that periodically blot out the sun in Beijing— and, according to Allen, ten years ago left a layer of fine sand on streets as far away as Korea, Japan and Taiwan—originate here. Kangbashi, despite its dearth of cars, is already surrounded by its own pall of smog. Such long-term arguments about degradation did not trouble the Ordos city planners, however, who simply added green goals to all their other targets. For them the decision to build Kangbashi by fiat was a no-brainer.
Not surprisingly, the Ordos sense of manifest destiny is not fully shared by Allen. He has already puzzled his way through some novel life choices that would have been unimaginable to his parents and grandparents in their traditional village. But the idea of moving out of the regional capital to a brand-new, undefined city was not an option that appealed to him. His first major decision was to borrow an annual 40,000 yuan ($6,000 at today’s exchange rate) from his parents and relatives to finance his studies at the University of Inner Mongolia. A second was to apply, along with other university strivers, to join the Communist Party. (He was pleased to have made the cut, though he never found that membership helped him especially.) A third was to focus on mastering English, a language that first gripped his imagination when he was in the fourth grade.
This preparation eventually landed Allen a job as tour guide that, at least in the warm months of the year, pays decently. He accompanies the occasional foreign tourists who arrive here and, more frequently, the growing number of Chinese who now lavish discretionary yuan on trips to their nation’s exotic peripheries. His preparation also won Allen a trip abroad, making stops in South Africa, Egypt, Dubai and Turkey as an interpreter for officials visiting Chinese construction sites. This sparked no wanderlust in him, though, and he turned down the offer of a high-paying two-year assignment in Africa. He rejected as well the alternative many of his classmates chose, and did not join the brain drain to the bright lights and warmer climates of Beijing or Shanghai. Instead, he set about acquiring a coveted permanent hukou (and not just a temporary student residency permit) for Hohhot. This he accomplished by buying a 78-square-meter apartment—its one drawback is the absence before midnight, in summer, of running water—in a new sixth-floor walkup. Such evidence of affluence qualified him for the permit.
Purchase of the flat required, of course, a long-term financial commitment. As soon as he had paid his family back for his university loans, he made a down payment of 100,000 yuan ($15,000) to lock in the price before the cost of Hohhot apartments shot up any more. He then took out a bank mortgage of 200,000 yuan ($30,000), to be paid back in monthly instalments of 1,248 yuan ($190) over 20 years. These financial obligations limit the personal choices he and his accountant wife are now making. They are postponing starting a family for two or three years to save first as much as they can. And they intend to stop at one child so they can give him or her the basic urban middle-class advantages that are getting more expensive every year.
To be sure, Allen sees drawbacks in raising a single child. “China is developing so fast, but people’s minds change very slowly. Look at all the bad behavior,” he reflects. “The children from the one-child policy are now growing up. They are very selfish and spoiled. They aim high, but they don’t work hard.” Still, he is determined to bring up his only child to be civilized and well-behaved, not to throw trash onto the street, and certainly not, as a teenager, to smoke in public.
Allen’s two brothers—Deng Xiaoping’s one-child policy was not enforced in the ethnic autonomous regions—followed quite different paths. His middle brother studied engineering, but has been unable to find any job except a low paying one at a telecom customer call center. To make ends meet, he still has to rely on extra help from his parents. Their kid brother, who chose not to continue his studies beyond secondary school, but to apprentice as a mechanic, will presumably always find work in what is now the world’s largest automobile market.
A Mongolian Gamble
In retrospect, did the Ordos movers and shakers err in their gamble? How much of a future can a city have that doesn’t convince Inner Mongolia’s very new yuppies—who can easily vote with their feet—that Kangbashi is the modish place to be?
Various visitors have answered these questions with a negative. One Beijing writer who ventured north of the Great Wall in 2008 started the trend by pouring scorn on this “ghost town” and “vacuum of the future.” Al Jazeera followed with more of the same in 2009. The more politically correct American media in 2010 preferred polite skepticism about the grandiose city that everybody loves to hate. Only a few dissenters—among them Bank of America-Merrill Lynch economist Ting Lu—judged instead that Ordos is actually avoiding the natural resource curse by investing its windfall gains intelligently.
Of course, China’s economic dynamism might decelerate in the next few years as the demographics change and the labor force slows its explosive growth. The real-estate bubble might burst at long last. Inner Mongolia could lose many more thousands of square miles to desertification. China could choke in its own smog.
But on the other hand, perhaps the Chinese speculators who have almost tripled the market prices of all those unoccupied apartments in just three or four years are onto something. Whoever thought, until it happened, that China could grow nearly 10 percent every year for three decades to become the world’s second largest economy, or that China would account for 75 percent of poverty reduction in the developing world in the past two decades, or that Beijing would rescue Greece by scooping up its bonds?
Maybe the question should be reversed. What fool would gamble against Kangbashi and the energies of all the Allens in Inner Mongolia?
Elizabeth Pond, a writer on international affairs, was a foreign correspondent for The Christian Science Monitor from 1967-1988 and the Editor of the quarterly Transatlantic Internationale Politik from 2000-2006. She is the author of Endgame in the Balkans: Regime Change, European Style; The Rebirth of Europe; and other books in the field of foreign policy and international affairs.
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