It was billed as China’s Dubai: A cluster of sail-shaped skyscrapers on a man-made island surrounded by tropical sea, the epitome of an unprecedented property boom that transformed skylines across the country.
However, prices on Phoenix Island, off the palm-tree lined streets of the resort city of Sanya, have plummeted in recent months, exposing the hidden fragility of China’s growing, but sometimes unbalanced economy.
A “seven star” hotel is under construction on the wave-lapped oval, which the provincial tourism authority proclaims as a “fierce competitor” for the title of “eighth wonder of the modern world.”
However, the island stands quiet aside from a few orange-jacketed cleaning staff, with undisturbed seaside swimming pools reflecting rows of pristine white towers, and a row of Porsches one of the few signs of habitation.
Chinese manufacturers once snapped up its luxury apartments, but with profits falling as a result of the global downturn many owners need to offload properties urgently and raise cash to repay business loans, estate agents said.
Now apartments on Phoenix Island which reached the dizzying heights of 150,000 yuan (US$24,000) per square meter in 2010 are on offer for just 70,000 yuan, local estate agent Sun Zhe said.
“I just got a call from a businessman desperate to sell,” Sun told reporters, brandishing his mobile phone as he whizzed over a bridge to the futuristic development on a electric golf cart.
“Whether it’s toys or clothes, the export market is bad ... property owners need capital quickly, and want to sell their apartments right away,” he said. “They are really feeling the effect of the financial crisis.”
Official figures showed an almost 8 percent increase in China’s total exports last year, but sales to Europe fell by almost 4 percent with the continent mired in a debt crisis and recession.
At the same time rising wages in China mean that producers of clothes, toys and other low-end goods are seeing their margins squeezed as other emerging economies compete to become the world’s center for cheap manufacturing.
For years Chinese business owners, faced with limited investment options and low returns from deposits in state-run banks, have used property as a store of value, pushing prices up even higher in the good times, but creating the risk of a crash in the bad.
“China had a lending boom ... and so if people are using property as a place to stash their cash, they had more cash to stash,” said Patrick Chovanec, a professor at Beijing’s Tsinghua University. “At some point they want to get their money out, then you find out if there are really people who are willing to pay those high prices.”
Phoenix Island is part of Hainan, a Belgium-sized province in the South China Sea that saw the biggest property price increases in China after a 2008 government stimulus flooded the economy with credit.
Eager buyers camped out in tents on city streets as prices shot up by more than 50 percent in one year.
However, tightened policies on access to credit and multiple house purchases have since knocked values in favored second home locations, even while prices in major cities they have rallied in recent months.
Real estate is a pillar of the Chinese economy, accounting for almost 14 percent of GDP last year and supporting the massive construction sector, making policymakers anxious to avoid a major collapse of the property bubble.
At the same time ordinary Chinese who cannot afford to buy a home have been frustrated by high housing costs for years.
With anger over graft also mounting, state media have carried several reports in recent weeks about corrupt officials’ property holdings, including a policeman who used a fake identity card to buy at least 192 dwellings.
Hainan’s tropical shores are said to be a hotspot for purchases by well-connected bureaucrats, but estate agents denied they were rushing to sell off apartments for fear of a crackdown.
Officials only account for around 20 percent of owners, they said — while doubting any new regulations would be properly enforced.
“There are always different rules for people with connections,” said one agent, asking to remain anonymous.
It is an example of the multiple competing interests the authorities have to balance, leaving them treading a difficult line, with sometimes unforeseen consequences.
On the other side of Hainan, at the Seaview Auspicious Gardens, which boasts beachside villas accessed by artificial rivers and a private library containing 100,000 books, prices have fallen by a third from a high of 12,000 yuan per square meter in the last year, and a third of the flats remain unsold.
Yang Qiong has a thankless task as one of its saleswomen.
“Before the government restrictions we would sell out a development like this in just five months,” she lamented.
On May 7, 1971, Henry Kissinger planned his first, ultra-secret mission to China and pondered whether it would be better to meet his Chinese interlocutors “in Pakistan where the Pakistanis would tape the meeting — or in China where the Chinese would do the taping.” After a flicker of thought, he decided to have the Chinese do all the tape recording, translating and transcribing. Fortuitously, historians have several thousand pages of verbatim texts of Dr. Kissinger’s negotiations with his Chinese counterparts. Paradoxically, behind the scenes, Chinese stenographers prepared verbatim English language typescripts faster than they could translate and type them
More than 30 years ago when I immigrated to the US, applied for citizenship and took the 100-question civics test, the one part of the naturalization process that left the deepest impression on me was one question on the N-400 form, which asked: “Have you ever been a member of, involved in or in any way associated with any communist or totalitarian party anywhere in the world?” Answering “yes” could lead to the rejection of your application. Some people might try their luck and lie, but if exposed, the consequences could be much worse — a person could be fined,
Xiaomi Corp founder Lei Jun (雷軍) on May 22 made a high-profile announcement, giving online viewers a sneak peek at the company’s first 3-nanometer mobile processor — the Xring O1 chip — and saying it is a breakthrough in China’s chip design history. Although Xiaomi might be capable of designing chips, it lacks the ability to manufacture them. No matter how beautifully planned the blueprints are, if they cannot be mass-produced, they are nothing more than drawings on paper. The truth is that China’s chipmaking efforts are still heavily reliant on the free world — particularly on Taiwan Semiconductor Manufacturing
Last week, Nvidia chief executive officer Jensen Huang (黃仁勳) unveiled the location of Nvidia’s new Taipei headquarters and announced plans to build the world’s first large-scale artificial intelligence (AI) supercomputer in Taiwan. In Taipei, Huang’s announcement was welcomed as a milestone for Taiwan’s tech industry. However, beneath the excitement lies a significant question: Can Taiwan’s electricity infrastructure, especially its renewable energy supply, keep up with growing demand from AI chipmaking? Despite its leadership in digital hardware, Taiwan lags behind in renewable energy adoption. Moreover, the electricity grid is already experiencing supply shortages. As Taiwan’s role in AI manufacturing expands, it is critical that