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David Gray / Reuters
Two men walk down a deserted street in front of the unopened Ordos Museum on May 11, 2011. In the wake of a coal boom, Ordos was built to house up to 1 million people but only 30,000 live there today.
BEIJING -- With miles of freshly paved roads, little traffic and some seriously avant-garde architecture, the Chinese city of Ordos provides a driving environment most car enthusiasts can only dream of.
Yet rich Chinese who have invested in the resource-rich city are now frantically rushing to sell off their new luxury toys to stem the excessive bleeding that has come with a steep decline in coal prices.
As the boom turns to bust, some luxury car owners are said to be asking for as little as 10 percent of the typical asking price.
Ordos, which sprung up from the deserts of Inner Mongolia, sits on a massive coal reserve. It supplies about 17 percent of China’s needs.
When coal was discovered there in the early 1990s, farmers cashed in, selling their land at sky-high prices to private coal mining companies.
The boom sent hundreds of thousands of migrant workers flocking to Ordos.
However, the bubble burst in July. Coal prices dropped for 11 straight weeks, leading to rampant lay-offs and little or no profit for local coal companies.
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One report suggested that 300,000 migrant workers who had traveled to Ordos to live and work had since left.
“Now that the economy is bad, many migrants have left,” lamented Li Rui, a cab driver in Ordos. “It’s still busy downtown, but it’s nothing like Beijing.”
'Anxious to sell'
But those gaping numbers are not the ones that Chinese netizens are breathlessly talking about.
Fueled by a recent report in the Economic Observer, the Internet exploded with rumors that some car owners in Ordos were liquidating their assets for as much as 90 percent off the going rate.
On a popular Ordos-based car sales website, one seller listed a 2009 Porsche Cayman for $79,032. Another owner had listed a Hummer for $80,600 with the plea, “anxious to sell.” In Beijing, a similar model Cayman would usually sell for $110,000, the Hummer for $121,000.
Zhou Hai, the manager of an Ordos-based dealership called Haohai Used Car Company, told NBC News that while prices have plummeted, it is not to the extent that people had claimed.
“The Internet is saying that my prices are 90 percent off, but in fact it’s only 50 percent,” he said.
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Zhou noted that he had a used 2010 Range Rover selling for $160,000, compared to the average price of $207,000 in other parts of China.
Cars imported to China typically are taxed extensively, sometimes raising the retail price to as much as three times the usual U.S. price.
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Ordos was supposed to be China’s Dubai, but the city built for 1 million people today has only 30,000 residents.
Investors across China have snatched up real estate – often with no intention to move in or rent out – in remote places like Ordos as a safe place to keep and grow their money.
China’s stock market is too unpredictable, bank interest rates in China are too low and strict government-mandated limitations on how Chinese can invest their money have encouraged many people to put their money into real estate.
'Ghost cities'
This phenomenon has contributed to what many experts believe to be a serious housing bubble and the rise of an increasing number of what have become known in China as “ghost cities.”
Speaking to NBC News earlier this year, Gillem Tulloch, managing director of research firm Forensic Asia described the confluence of these economic events for ghost cities like Ordos as being: “Empty roads, empty buildings, empty neighborhoods, empty cities -- all over China.”
The ghosts that haunt China's economic landscape
Meamwhile, a report from Ordos’ municipal government noted that at the end of April only 40 percent of Ordos' 324 residential construction projects were still under way. Of the 49 new projects, only seven were said to still be in progress.
According to Zhang Xiaofei of Ruili Real Estate in Ordos, 20 percent more people each month are trying to sell their homes in the city, and prices are as low as $320 per square meter, compared to the average suburban price of $800 per square meter.
NBC News’ Yanzhou Liu contributed to this report.
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Leave a Comment:
Good!!!!!!
Time for the U.S. to flood China with inexpensive coal...
Come on guys show some class. It says "China's Dubai" so go after Dubai! :)) That where the poorest drive some of the most expensive cars, people also get lots of funds to drive camel all day and women are told to stay home, do nothing go nowhere, and get paid a lot for that too. At least the natives! Here are some fun funny classy jokes about Dubai from Dubai residents:
It is so hot in Dubai that...
The potatoes cook underground, and all you have to do to have lunch is to pull one out and add butter, salt and pepper.
The trees are whistling for the dogs.
You no longer associate bridges with water.
You can make instant sun tea.
You learn that a seat belt makes a pretty good branding iron.
The temperature drops below 95, you feel a bit chilly
The 4 seasons are: tolerable, hot, really hot, and ARE YOU KIDDING ME??!!
No one would dream of putting vinyl upholstery in a car or not having air conditioning because you would be seriously burned or possibly die.
You realize that asphalt has a liquid state.
Your children ask what that wet stuff is on the windshield because they don't remember rain
And Indians in Dubai think Mumbai in the winter and Arizona in the summer is too cold!
Welcome to capitalism!
This is because Americans do not understand the Chinese discount structure. When the Chinese quote you a 90% discount it means they are selling it to you at 90% of the original cost, that is a 10% discount. In the US a 90% discount means they are selling it to you at 90% off the original price. We use "off", they use "of". Always tough for Americans to comprehend this when they first go to China. Also what leads to misleading articles such as this one.
Does, Johanna Armstrong, NBC News, know the difference between anxious and eager?
'Anxious to sell', hum, I would say they are quite "eager to sell". Too many times that mistake is in news reports. Please do not tell us anxious is an acceptable alternative to eager. Being as the author of the article is with NBC news his misuse of anxious is unacceptable. Where is your proof reading NBC News?
I think Johanna is a woman's name, Bubba.....but I agree that she is not a good writer.
China Taxes U.S. automobiles Three Times their worth? We should do the same to ALL Chinese products coming into this country. Wake the HELL UP Washington.
When money comes, those who have never had much seem to spend foolishly. Now they will understand better the old saying "A fool and his money are soon parted."
Our politicans have never been known for their brains. Need I say more
Not even Ben Franklin? Theodore Roosevelt? Thomas Jefferson? James Madison?
Maybe the problem is the electorate not being edu-macated enough to understand an intelligent politician and therefore vote for him/her.
I may be wrong on this whole thing. But it appears the Chinese can afford these items more than Americans can. I am glad someone can, but,...I am worried about the laws in China...which may mean "huh..laws? HERE?" that do not protect the average WORKING citizen from being literally mowed down by some mistakenly entitled piece of crap...who actually thinks he or she (in future referred to as IT) is more important to society than the people they run down...because they cannot control the car. If you cannot control the car, you should not own it. Common sense for the American people, but...China...they have no clue to a person's worth. Never have and never will. My opinion only.
The wealthy in China are a small minority of the population. But that still is a lot of people.
Out of a population of 1,344,000,000, the top one % is still 13.44 MILLION people.
he. Well, we narrowly escaped this exact type of thing with this last election.. what with Mitt Romney and his phony "clean coal" revolution, and the inevitable bubble.
Hahaha liberal media fails at math. 10% the price or 90% off and then you give figures that are way out of line with your claims.. Do you idiots at NBC have calculators? OK, here's a tip for college professors: teach them math while indoctrinating your retarded liberal values. wtf is wrong with you people?
Maybe these Chinese will finally learn there is a limit to their gross spending at the expense of the poor. No pity for these leaches who made their fast money by fleecing their own people and trying to control prices at the expense to other nations. Nothing like a bit of trouble to kindle social unrest. Hopefully the Chinese people will finally realize how they have been cheated by their government which is only interested in making officials fat with cash while the regular people do without. Typical Chinese behavior in the part of gov officials in China. May China's economy go bust to the delight of everyone else. Enough unrest and China will be too busy watching its government fall. The current regime came to power by force of arms and may it go down quickly by force of arms of the common people
What? Coal prices are low? Is that why the coal industry sucks?
But. . .but. . .Romney and Ryan told us Obama was having a "War on Coal."
I guess it wasn't a "War on Coal" so much as it was an ignorance of economics.
My questions for coal miners are, . . .
"You are aware, Mr. Coal Miner, there is a finite amount of coal in the ground and at some point, perhaps not in our generation or your children's generation, some time in the future, your family is going to have to find something else to do to make a living, right?"
"What are you, Mr. Coal Miner, doing to re-educate yourself to make yourself marketable in the post-coal work-force?"
"Or were you just going to heap that burden on your children or your grand children?
Way to take care of your family there, Mr. Coal-Miner.
I know what you're going to say. "But coal kept my family clothed and kept food on the table."
Yes, but it also kept you from gaining the skills necessary to work in the modern world. It may have been good enough for your "Diddy", but you have shirked your responsibility by following him down in the ground.
I have no sympathy for them and I'm from West Virginia. If coal-mining was anything but a temporary job so that you could put yourself through school to do something better, then that is your problem.
some car owners in Ordos were liquidating their assets for as much as 90 percent off the going rate.
On a popular Ordos-based car sales website, one seller listed a 2009 Porsche Cayman for $79,032. Another owner had listed a Hummer for $80,600 with the plea, “anxious to sell.” In Beijing, a similar model Cayman would usually sell for $110,000, the Hummer for $121,000.
I think Joanna Armstrong needs to learn some basic math. 80,000 is not 10% of 110,000 or 121,000.......
That is what happens when people are near-sighted!!
I have been to China three times for work and have been told by citizens there that they cannot buy or sell real estate in their own country; the "government" owns it all and Chinese people live on it and can be removed on short notice. This article suggests otherwise. I'm not sure who to believe.
Sounds like coal is doing even worse in China than it is here in SW Virginia. I wonder if the chinese blame Obama for that?
Ok, if China is Communist, and in Communison all peopl of society are equal, how can there be "rich" communistS?
reeeeechhhh-cecillll, thass cuz they lern'ttttn tit frum OUR MEXIMERICAN CORRRRRUPPPPT polititions/judges/lawyurrz, Senioratuurz n CON-GREEEEASE-PEOPLE too!! (thass yesssss greease-ingggg the wheels under thaa TABLE MONIEEEEEES UNO-it-too).
ericc 1964, >>> OMG, yur sooooooooo smart!!! WOW are yu a farttz smellur!!! Yasssssarrrrarrrrr-arrrrrrafffffatttt cat yo sho izz, den heeeeey BOYYYY!
It is a luxury car that I like a lot of event.
And I also have a website about Luxury car as well ask for it Luxury car.
The Chinese tax American products sometimes raising the price three times higher? You mean our friends in China have protective tariffs against American products? Our most favored nation status China doesn't want a trade balance? I am soooo surprised.
Create 200,000 American jobs this month: buy American products for Christmas.
Whoever wrote the headline for the article stating the cars were "sold for a song" must be grossly overpaid given the examples of the prices included in the article. Whoever wrote the headline, or gave instructions for the wording, is grossly overpaid by NBC news. Pathetic.
:)