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.
Saudi Arabian largesse is flooding Egypt’s cultural scene, but the reception is mixed. Some welcome new “cooperation” between two regional powerhouses, while others fear a hostile takeover by Riyadh. In Cairo, historically the cultural capital of the Arab world, Egyptian Minister of Culture Nevine al-Kilany recently hosted Saudi Arabian General Entertainment Authority chairman Turki al-Sheikh. The deep-pocketed al-Sheikh has emerged as a Medici-like patron for Egypt’s cultural elite, courted by Cairo’s top talent to produce a slew of forthcoming films. A new three-way agreement between al-Sheikh, Kilany and United Media Services — a multi-media conglomerate linked to state intelligence that owns much of
The US and other countries should take concrete steps to confront the threats from Beijing to avoid war, US Representative Mario Diaz-Balart said in an interview with Voice of America on March 13. The US should use “every diplomatic economic tool at our disposal to treat China as what it is... to avoid war,” Diaz-Balart said. Giving an example of what the US could do, he said that it has to be more aggressive in its military sales to Taiwan. Actions by cross-party US lawmakers in the past few years such as meeting with Taiwanese officials in Washington and Taipei, and
The Republic of China (ROC) on Taiwan has no official diplomatic allies in the EU. With the exception of the Vatican, it has no official allies in Europe at all. This does not prevent the ROC — Taiwan — from having close relations with EU member states and other European countries. The exact nature of the relationship does bear revisiting, if only to clarify what is a very complicated and sensitive idea, the details of which leave considerable room for misunderstanding, misrepresentation and disagreement. Only this week, President Tsai Ing-wen (蔡英文) received members of the European Parliament’s Delegation for Relations
Denmark’s “one China” policy more and more resembles Beijing’s “one China” principle. At least, this is how things appear. In recent interactions with the Danish state, such as applying for residency permits, a Taiwanese’s nationality would be listed as “China.” That designation occurs for a Taiwanese student coming to Denmark or a Danish citizen arriving in Denmark with, for example, their Taiwanese partner. Details of this were published on Sunday in an article in the Danish daily Berlingske written by Alexander Sjoberg and Tobias Reinwald. The pretext for this new practice is that Denmark does not recognize Taiwan as a state under