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.
Minister of Labor Hung Sun-han (洪申翰) on April 9 said that the first group of Indian workers could arrive as early as this year as part of a memorandum of understanding (MOU) between the Taipei Economic and Cultural Center in India and the India Taipei Association. Signed in February 2024, the MOU stipulates that Taipei would decide the number of migrant workers and which industries would employ them, while New Delhi would manage recruitment and training. Employment would be governed by the laws of both countries. Months after its signing, the two sides agreed that 1,000 migrant workers from India would
Japan’s imminent easing of arms export rules has sparked strong interest from Warsaw to Manila, Reuters reporting found, as US President Donald Trump wavers on security commitments to allies, and the wars in Iran and Ukraine strain US weapons supplies. Japanese Prime Minister Sanae Takaichi’s ruling party approved the changes this week as she tries to invigorate the pacifist country’s military industrial base. Her government would formally adopt the new rules as soon as this month, three Japanese government officials told Reuters. Despite largely isolating itself from global arms markets since World War II, Japan spends enough on its own
On March 31, the South Korean Ministry of Foreign Affairs released declassified diplomatic records from 1995 that drew wide domestic media attention. One revelation stood out: North Korea had once raised the possibility of diplomatic relations with Taiwan. In a meeting with visiting Chinese officials in May 1995, as then-Chinese president Jiang Zemin (江澤民) prepared for a visit to South Korea, North Korean officials objected to Beijing’s growing ties with Seoul and raised Taiwan directly. According to the newly released records, North Korean officials asked why Pyongyang should refrain from developing relations with Taiwan while China and South Korea were expanding high-level
When 17,000 troops from the US, the Philippines, Australia, Japan, Canada, France and New Zealand spread across the Philippine archipelago for the Balikatan military exercise, running from tomorrow through May 8, the official language would be about interoperability, readiness and regional peace. However, the strategic subtext is becoming harder to ignore: The exercises are increasingly about the military geography around Taiwan. Balikatan has always carried political weight. This year, however, the exercise looks different in ways that matter not only to Manila and Washington, but also to Taipei. What began in 2023 as a shift toward a more serious deterrence posture
RSS