'Ancient towns' aggravating local debt and graft

Some "ancient town" tourism projects featuring pseudo-classical architectural style buildings funded by local governments can hardly make ends meet with the economy experiencing a cold winter.

Dayong town located in Zhangjiajie, Hunan province, is one of them. With a total investment of 2.5 billion yuan ($344.7 million), the town, which covers an area of 21.67 hectares, was rebuilt as it was believed to be like during the early Qing Dynasty (1644-1911) to attract tourists.

Yet, in the first half of this year, the town attracted only 2,300 tourists. Some of the visitors used such words as "desolate", "deserted" and "not worth recommending" to describe the current situation of the town, which started losing money since it commenced trial operations in 2021.

Worse, there are many such projects still being built in the country, as local governments believe they can become the next cornucopia. Statistics show that there are more than 2,800 such "ancient towns" finished and being built in China now. But many of them have run into revenue difficulties or even been left unfinished due to problems with planning, funding, construction or management.

The natural, historical and cultural resources vary from place to place. The planning and development of "ancient town" projects should be adapted to local conditions, fully tapping and utilizing local natural landscape and cultural resources. More importantly, the investors should have done enough market research before making the decision.

Since 2014, due to the policy support for the development of the cultural and tourism industry, many counties and cities have launched such projects in a short time, resulting in the current "oversupply".

Most aborted projects have failed because they didn't respect market law, as their investors blindly believed they would become popular the moment they were opened. But they indeed became a part of the law at last, though as a debt burden to local governments.

In order to compete for limited customers, the surviving projects have engaged in price wars, lowering the standards of services, management and maintenance and leading the industry to unsustainable "involutionary" competition.

In addition, many investigations into corrupt officials have demonstrated that blindly carrying out large-scale infrastructure projects that are not directly related to people's livelihoods in a short period of time often involves a lot of investment and bidding that create opportunities for power-for-cash exchanges.

In other words, many such "ghost towns" have actually been vanity projects from the very beginning or used as white gloves to turn government borrowing and investment into a cash cow for corrupt officials.

With moderately loose monetary policies being implemented to stimulate domestic demand, the already debt-ridden local governments should avoid the "ancient town" pitfalls, and refrain from simply using rash investment to spur a flash-in-the-pan growth.