Does China have 64 million empty apartments?
Does China have 64 million empty apartments?
The importance of checking your sources
Business Insider: China has 64 million vacant homes, including entire cities that are empty
I was always fascinated by this “64 million empty apartments” number from the first time it flashed across my news feed — but not because I was amazed at the sheer audacity of the number or “what it said about the current state of China”. Indeed, even from the beginning I could never quite accept it at face value and it was something I had always wanted to dig into.
No, what fascinated me was how so many people — including some of the smartest, most rational people out there — took this number at face value despite how ludicrous and non-intuitive it sounded (at least to my ears).
Well now I have had the chance to dig in and what I found was pretty interesting. Not only is the number itself highly suspect, I think this is a prime example of how unverified “facts” and sloppy reporting can perpetuate a myth and turn it into an idea that eventually becomes enshrined as unquestioned truth.
Let’s dig into this together and you will see what I mean. We’ll start with the link provided in the question source.
As you can see above, the “source” of this is the “Chinese Academy of Social Sciences” which makes it sound very official indeed. Don’t worry, it’s not fake — here is its official website: Chinese Academy of Social Sciences. But when you actually click on the link itself, it goes to a random Italian website.
There is no mention of Chinese Academy of Social Sciences (CASS) in this article. I thought maybe the map was from CASS although upon closer inspection it looks like it really just came from Google Maps. “That was strange,” I thought to myself. But let’s move past this for now — I will come back to CASS as it does pop up again later in this story.
As highlighted in red, the article notes: “Statistics show that there are at least 64 million uninhabited apartments for 6 months or more in the country.” It goes on to state that “Analysts observe that based on the average Chinese family of 3, to (sic) 64 million apartment (sic) are the equivalent to homes for 192 million people.” Wow that sounds pretty bad/scary … that's almost one-third of the urban population!
Of course “Statistics” and “Analysts” remain unnamed and anonymous alongside their close cousins “It is being reported” [1] and “It is said” [2] I found in other articles. And let’s not forget the most famous member of the extended family “Many people have said” …
It would have been nice to have links to actual real sources but clearly I’ve hit a dead end with this specific article.
But I am a persistent fellow and I do want to get to the bottom of this number. Time to roll up my sleeves.
I did a Google search on the term “ghost cities in China” now with a custom date range and the first mentions of this — that did not have to do with Fengdu, the original “ghost city” — really began to show up in the Fall of 2009.
Here is the November 2009 investigative report from Al Jazeera that just so happens was the first major media report on the topic: Al Jazeera: China's empty city. It focuses on Ordos which later becomes the poster child for the “ghost cities” meme.
I then followed up with a Google search for “64 million empty apartments” and the earliest mention of this figure was an article from the September 2010 issue of Finance Asia (Finance Asia: A question of time). Here is the relevant text:
Recent statistics show that there are about 64 million apartments and houses that have remained empty during the past six months, according to Chinese media reports. On the assumption that each flat serves as a home to a typical Chinese family of three (parents and one child), the vacant properties could accommodate 200 million people, which account for more than 15% of the country’s 1.3 billion population. But instead, they remain empty. This is in part because many Chinese believe that a home is not a real home unless you own the flat.
Now we are getting somewhere. The original source of this number came from local “Chinese media reports” so now I need to move the investigation over to the Chinese Internet and flex some of my Chinese skills.
I now find myself on Baidu, China’s default search engine. Entering “6450万空置房” (i.e. “64.5 million empty apartments”) into the query engine I quickly get to what I was searching for.
What happened was that a researcher surnamed Cao from the Chinese Academy of Social Sciences (remember from above?) reported on his research that there were “up to 65.4 million empty apartments” in China. This research was reportedly based on electricity meter reading data from the power company as well as calculations based on data like vacancy rates.
But the problem is that this research was highly disputed within China from the beginning. The power company denied the veracity of the data and many other analysts and bloggers challenged the assumptions used in Cao’s research. Here are some examples:
QQ Finance News: 专家称6540万套空置房统计数据不靠谱
Sina (blogger): 陈宝存：编造“6450万套空置”的牛刀脸在哪儿？_陈宝存经济学家_新浪博客
Baidu Baike (similar to Wikipedia) covers the debate here: Baike: 6540万空置房
Zhihu (Quora’s Chinese brother) also covers the debate here: 任志强质疑6800万套空置房：学者查过统计年鉴吗？
Now maybe this Cao guy was still correct — I have not seen and personally verified his calculations or looked at his research methodology. Or perhaps as the Sina blogger argued, he was a random person trying to make a name for himself by reporting an extremely sensational number that would attract attention — as it clearly did. Then again, maybe the Sina blogger and Zhihu writers are all “Wumao 五毛” paid shills. One can never really be 100% certain.
But the point I want to make here is that reporting and representing the “64 million empty apartments” as a hard fact without really trying to understand the context around it is highly misleading. There are the small errors (that some of you may have noticed) about how even the original number itself did not translate correctly — Cao’s originally reported “65.4 million” somehow turned into “64.5 million” before being rounded to “64 million” by the time it hit the English-speaking world.
And somewhere along the line “up to” (which could mean any number from 0 to 65 million) had turned into “at least” (which means 65 to infinity). Subtle changes in semantics can change a phrase’s entire meaning.
I’ve seen six-year olds playing Telephone where the message at the end of the line retains more of its original meaning.
The reality is that the source of “64 million empty apartments” figure was one guy’s research that was considered controversial. By no means was it a hard figure based on an exhaustive research effort, tested subsequently by independent follow-up research that was able to substantiate the claim. And when it was ported over to the English-speaking world, it was further distorted and taken out of context and presented as hard fact.
Relying on it and taking it as gospel without bothering to dig into the details and figure out where it came from is incredibly foolish.
But there were many media outlets that latched on to this number and it somehow became the de facto tagline for the entire “ghost city” meme. The most prominent report I remember was the 60 Minutes segment that aired in March 2013 (China's real estate bubble).
Reality, it turns out, is a lot more nuanced [3]: From Forbes: An Update On China's Largest Ghost City - What Ordos Kangbashi Is Like Today:
Neither of these reporters bothered to ask the local government or anyone involved in building the new district about why they observed so many empty buildings, a fact that the city’s administration later pointed out in disgust. Also, what was merely glossed over in these stories was the fact that construction only began a mere six years before -- a scant amount of time for a completely new city for hundreds of thousands of people to be reasonably built and populated.
“I think at the time most Western media reported about Kangbashi as a ‘ghost city’ there was indeed very few people here,” an Ordos native surnamed Wang explained. “There were also some misunderstandings; they don't know exactly about the reasons for and the changing steps of Kangbashi. Moreover, sometimes reporters like to make amplifications of facts to attract readers.”
Ordos, a city built for nobody out in the middle of a desert, is a fascinating, chilling story, but it’s simply not true. The real story is perhaps more matter-of-fact, mundane, and less worthy of hype.
I do not profess to know the right answer. There has obviously been degrees of excess in China, but I could not tell you at this point whether the right number is 6 million empty apartments or 65 million. I suspect it is significantly lower than 65 million but please do not quote me without adding the disclaimer that this is one man’s opinion, one that is barely a notch above being a complete guess.
And even if we get to a more accurate figure, context is still important. Does that figure include my parents’ apartment in Zhongshan? After all, they are only there a limited portion of the year. How about our ancestral village home in Taishan? As far as I know it is still standing after all these years and remains uninhabited. Both of these aren't real examples of excess and waste in China yet they could very well be counted as part of a figure that many believe captures the essence of those things. Context matters. The details matter. And in this case we just don't have very much of either.
What I do want to leave you with are a few thoughts that came out of this exercise:
Going through this exercise showed me how it is possible for news that has barely a kernel of substance can turn into gospel. Now I kind of understand how easy it is to generate “fake news” in the Internet/social media era. If well-intentioned news sites and trained journalists can get it wrong and perpetuate misleading ideas, imagine how easy it is for organizations whose intentions are far less noble.
Don’t just take any news story or even a whole seemingly convincing meme to be true — question it, dig into the details, “peel the onion” and come up with your own conclusions based on evidence. This is the only way you can build true conviction and discern between reality and fantasy.
Stories that draw on foreign sources demand an even higher level of scrutiny. Much can be lost in translation especially when it is difficult for regular people who don’t read/speak a foreign language to verify facts and details. We rely on journalists to do this work but as we saw here they don't always dig into the story as much as they should.
Relying on intuition to figure out if something “feels” right is really tricky when it comes to a foreign place like China. It is just not a non-intuitive place for foreigners — or locals, even. I have followed and studied China for decades, spent significant time living and working there, have decent enough Mandarin and count many Chinese as my friends and ex-colleagues. Yet it still manages to surprise me time and time again. Handing control over to intuition often just leads to confirmation of pre-existing notions and that is dangerous.
Wrapping suspect/BS data in analysis does not improve the conclusion. Here I am specifically referring to the oft-repeated math that gets you from “65 million empty apartments” to “200 million people”. As Greek mathematician Euclid once stated, “BS multiplied by 3 is still BS”.
Truth and reality are rarely black and white. Truth is almost always nuanced and complicated and this forces you to work in probabilities vs. binaries. For example I can say “I am 99% sure that the ‘over 64 million empty apartments’ figure is inaccurate.” This leaves open a 1% chance that I am wrong and, more importantly, leaves my mind open to change based on future evidence.
I have yet to see evidence to suggest that the “64 million empty apartments” figure was ever more than the figment of one random guy’s imagination. If someone has it for me, I’d love to dig through and consider whether I need to amend the probabilities or even change my mind completely.
Notes
[1] GHOST CITIES IN CHINA: 64.6 million empty homes, apartments & condos
It is being reported that 64.5 million urban electricity meters registered zero consumption over a recent, six-month period in China. That led to a theory that China has enough empty apartments to house 200 million people. The story is related to the housing bubble, as the CAIXIN TABLOID reported in the summer of 2012.
[2] Dateline questions the China growth story
REPORTER: Is China experiencing a property bubble?
GILLEM TULLOCH, FORENSIC ASIA: Absolutely. A property bubble like which I don’t think we’ve ever seen.
REPORTER: Bigger than the one in the United States?
GILLEM TULLOCH: Yes, I think it will make the United States pale in comparison. It is said that there are 64 million empty apartments in China.
REPORTER: 64 million?
GILLEM TULLOCH: 64 million.
[3] Please note that the Forbes article was not referring to the CBS segment specifically here, but two other earlier reports.
This was originally published on Quora in December 2017.