Ghost towns point to need for better planning, expert says

Economics experts have urged governments to set specific goals and avoid mass infrastructure construction when building new towns.

"Detailed planning for industrial development is vital while building new towns to support China's mass urbanization process, otherwise it will do no good for long-term economic development," leading economic geographer Lu Dadao said during the China Industrial Park Innovative Development Conference held in Langfang on Sunday.

Lu cited a ghost town in China that failed to attract residents and is now left with only partially complete and mostly abandoned buildings.

China had established more than 3,500 new towns as of July 2016, according to the latest data compiled by the National Development and Reform Commission's think tank.

Jia Kang, director of the China Academy of New Supply-side Economics, said building infrastructure in new cities can act as a buffer to economic downward pressure and helps deal with overcapacity problems, but local government construction needs to be efficient and produce long-term economic and social benefits.

"The public-private partnership model should be the major funding model, because the private sector's interest in economic returns will help the government improve the fiscal spending structure," he said. "Some local governments rely on mass fiscal spending, making investment into infrastructural projects only to pursue headline growth numbers."

In order to attract private capital for PPP projects that typically take a year to finish, the government can use taxpayers' money to compensate for economic loss, according to Jia.

Liu Shilin, head of the Research Institute of Urban Science at Shanghai Jiaotong University, is more positive.

He said empty new towns do not necessarily reflect a planning failure.

"As the urbanization consolidates, more people will undoubtedly move into these cities," he said.