Skip to main content

World's biggest mall a China 'ghost town'

By Johan Nylander, for CNN
updated 11:27 PM EST, Sat March 9, 2013
The New South China Mall is filled with palm-trees, cafés, canals and leisure facilities - but few customers. The mall has capacity for 2,350 stores, yet after eight years is considered a "dead mall." The New South China Mall is filled with palm-trees, cafés, canals and leisure facilities - but few customers. The mall has capacity for 2,350 stores, yet after eight years is considered a "dead mall."
HIDE CAPTION
A walk through a ghost mall
A walk through a ghost mall
A walk through a ghost mall
A walk through a ghost mall
A walk through a ghost mall
A walk through a ghost mall
<<
<
1
2
3
4
5
6
>
>>
STORY HIGHLIGHTS
  • The New South China Mall in Guangdong Province is the world's largest mall
  • But since its opening in 2005, few tenants and customers have come to the store
  • "Most of it empty, with little consumer traffic and a high vacancy rate ... a 'dead mall'"
  • China littered with"ghost towns," empty commercial spaces built in speculative boom

Dongguan, China (CNN) -- They built it, but the shoppers didn't come.

New South China Mall in Guangdong Province opened in 2005. With 5 million square feet of shopping area, the mall can accommodate 2,350 stores, making it the largest shopping center in the world in terms of leasable space -- more than twice the size of Mall of America, the biggest shopping center in the United States.

At the outdoor plaza, hundreds of palm-trees blend with a replica Arc de Triomphe, a giant Egyptian sphinx, fountains and long-stretching canals with gondolas.

Only problem is, the mall is virtually deserted. Despite the bombastic design and grand plans, only a handful of stores are occupied. "Most of it empty, with little consumer traffic and a high vacancy rate," according to a report last year by Emporis, a global building data firm. "It has been classified as a 'dead mall.'"

Walking among shattered shops -- its dusty corridors and escalators covered in soiled sheets -- is a walk through a ghost mall. Rubbish piles up along the sides, paint is coming off the walls and store signs and advertisements have faded.

The mall's indoor amusement park, staff lay half asleep over counters or kill time chatting with each other while the 1,814-foot rollercoaster roars above.

On China: Chinese cinema boom
Politician throws computers at airport
A new town, with few residents
20% of houses in Spain sit empty

Opened for the public in 2005, developers expected to attract some 100,000 visitors a day. But eight years later, the few people that visit the mall today typically hang out at the American fast food restaurants near the entrance or at the IMAX cinema outside the mall. Some parents bring their children to the Teletubbies Edutainment Center.

Part of the problem is location. Dongguan is a factory town and most of its almost 10 million inhabitants are migrant workers struggling to make ends meet. "People coming here to work in factories don't have the time or the money for shopping or the rollercoaster," said a migrant worker in his 20s, surnamed Xiao, who works at the mall.

The deserted mall is also a symbol of China's rapid urbanization and runaway investment in real estate projects, where massive development projects have been given the go ahead without proper marketing and business research.

"To me, many of these projects are a result of easy access to capital and a combination of wishful thinking and speculative behavior rather than rational business calculations," said Victor Teo, assistant professor at the University of Hong Kong.

"This mall is not the only one that is like that. Elsewhere in China there is the phenomenon of 'Ghost Towns', that is to say infrastructure projects, both residential and commercial, with no takers."

The credit boom of post-financial crisis stimulus has resulted in a proliferation of empty commercial developments and apartments built on rampant speculation. Yet why is the Chinese economy still moving at a brisk 7% to 8% growth rate?

"What China did in the stimulus credit boom is create a lot of `ghost cities': projects without a strong commercial foundation, and projects that didn't get done," wrote Jonathan Anderson in a research note entitled "Hurray for Ghost Cities" from Emerging Advisors Group last month. "What happens next?

"In most of the economy ... nothing. You haven't created a lot of new productive capacity; you're not driving down profits and returns in manufacturing and services, and you've left plenty of room for a rebound in the market-oriented property space.

"Rather, for all intents and purposes you just took the money and poured it down a black hole," Anderson wrote. And the Chinese banking system "has surprisingly little trouble absorbing that bad debt."

But while the macroeconomic juggernaut of China marches on, there remain regional areas of woe. Dongguan is facing mounting problems as factories close down and manufacturing moves to other cities in China and abroad which offer cheaper labor.

Still, the mall has plans to boost the number of tenants, said Ye Ji Ning, head of New South China Mall's investment unit. He claims the mall has a 20% occupancy rate measured by commercial area, although Ye declined to give specifics when challenged on that number. The company's goal is to increase occupancy to 80% in 2013, he said.

"From March onwards we will have big promotional activities in order to reach our new leasing targets," Ye said.

It's not the first time the owners try to blow life into the sleeping giant. The mall was initially headed by Dongguan native Alex Hu Guirong, who became a billionaire in the instant noodle business, and later sold to the Founders Group, a conglomerate set up by Peking University.

In a 2007 relaunch, the mall changed name from "South China Mall" to "New South China Mall, Living City" and a revitalization plan was drawn up. But after the relaunch, neither shoppers nor tenants came.

ADVERTISEMENT
Part of complete coverage on
updated 1:13 AM EDT, Tue August 19, 2014
Chinese are turning to overseas personal shoppers to get their hands on luxury goods at lower prices.
updated 5:08 AM EDT, Fri August 15, 2014
Experts say rapidly rising numbers of Christians are making it harder for authorities to control the religion's spread.
updated 12:52 AM EDT, Mon August 11, 2014
"I'm proud of their moral standing," says Harvey Humphrey. His parents are accused of corporate crimes in China.
updated 3:42 PM EDT, Wed August 6, 2014
A TV confession detailing a life of illegal gambling and paid-for sex has capped the dramatic fall of one of China's most high-profile social media celebrities.
updated 12:10 AM EDT, Thu July 31, 2014
President Xi Jinping's campaign to punish corrupt Chinese officials has snared its biggest target -- where can the campaign go from here?
updated 3:12 AM EDT, Wed July 30, 2014
All you need to know about the tainted meat produce that affects fast food restaurants across China, Hong Kong, and Japan.
updated 10:30 PM EDT, Thu July 17, 2014
Some savvy individuals in China are claiming naming rights to valuable foreign brands. Here's how companies can combat them.
updated 5:11 AM EDT, Wed July 16, 2014
Is the Chinese president a true reformist or merely a "dictator" in disguise? CNN's Beijing bureau chief Jaime FlorCruz dissects the leader's policies
updated 11:44 PM EDT, Mon July 7, 2014
With a population of 1.3 billion, you'd think that there would be 11 people in China who are good enough to put up a fight on the football pitch.
updated 2:31 AM EDT, Fri July 4, 2014
26-year-old Ji Cheng is the first rider from China to compete for competitive cycling's highest honor.
updated 7:24 AM EDT, Mon July 7, 2014
China's richest man, Wang Jianlin, may not yet be a household name outside of China, but that could be about to change.
updated 7:57 PM EDT, Thu July 3, 2014
When President Xi Jinping arrives in Seoul this week, the Chinese leader will have passed over North Korea in favor of its arch rival.
updated 2:56 AM EDT, Tue July 1, 2014
The push for democratic reform in Hong Kong is testing China's "one country, two systems" model.
updated 7:56 AM EDT, Mon June 30, 2014
Along a winding Chinese mountain road dotted with inns and restaurants is Jinan Orphanage, a place of refuge and site for troubled parents to dump unwanted children.
updated 4:36 AM EDT, Thu June 26, 2014
CNN's Kristie Lu Stout invites Isaac Mao, Han Dongfang, and James Miles to discuss the rise of civil society in China and social media's crucial role.
updated 11:34 PM EDT, Wed June 25, 2014
Chen Guangbiao wants rich people to give more to charity and he'll do anything to get their attention, including buying lunch for poor New Yorkers.
updated 7:44 AM EDT, Thu June 26, 2014
Architects are planning to build the future world's tallest towers in China. They're going to come in pretty colors.
ADVERTISEMENT