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Why Hundreds Of Completely New Cities Are Being Built Around The World
Asia and Africa's economic futures are inherently tied to new city building and development. These are the places where the money is going and the investment opportunities are arising.
Everything about Songdo is artificial. It is a built from scratch, “city in a box” that was purchased by the South Korean government for $40 billion and erected like a pop up tent over the past 15 years. Even the ground that the city is built upon was nothing but soggy marshes leading out to the Yellow Sea hardly half a generation ago.
But what is most striking about Songdo isn't that it is a completely new city that built up a business base and a 130,000-person population in just handful of years, but the fact that it is not unique. In this era of compulsive new city building, Songdo has oddly become a new normal.
Literally, hundreds of entirely new cities have been sprouting up across Asia and Africa since the early 2000s. They are totally new dots on the map with names like Putrajaya, Naypyidaw, Nanhui, Kangbashi, Dompak, and Khorgos. There is a Forest City, a King Abdullah Economic City, a Blue City, a Gracefield Island, a Tbilisi Sea New City, a Port City, a Waterfall City, and, yes, even a Robotic Future City. In all, over 40 countries -- such as Malaysia, Nigeria, China, Morocco, India, Saudi Arabia, Ecuador, Oman, Kazakhstan, and Kenya -- have dumped billions of dollars into developing new cities from the ground up. Indonesia alone is busy at work constructing no less than 27 new cities.
What are new cities?
New cities tend to conceal nothing in nomenclature; they are exactly what they say they are: new cities -- completely new urban organisms that are fully masterplanned, built in colossal waves of development, which have their own governments, economic engines, and social identities. New cities should not be confused with mere urban expansion or sprawl. While they are sometimes not entirely different in practice — and the lines between them can get very blurred — they are at root their own metropolitan entities.
“I define new cities as urban mega-projects that are intended to be largely independent from existing cities and have their own industries. They are physically separate from existing settlements, in contrast to suburbs or gated communities,” explained Dr. Sarah Moser of McGill University, who runs what is probably the world's foremost research institute tracking new city development.
Khorgos, a new city on Kazakhstan's border with China, is built up around a dry port.
How big are they?
The scale and scope of Asian and African new cities is nearly incomprehensible in the current Western view of development. China’s Binhai New Area, a conurbation of development projects that contain two new financial districts, a high-tech zone, an eco-city, and an expanded port weighs in at 2,270 square kilometers, which is around the same size as Tokyo. Zhengzhou's Zhengdong New District is three times the size of San Francisco. Chengdu's Tianfu could evenly eclipse London. Changzhou's Wujin New District has a footprint that matches that of Los Angeles. Saudi Arabia’s King Abdullah Economic City is the size of Washington D.C.. While Malaysia’s Forest City — a veritable new colony for 700,000 Chinese transplants on the doorstep of Singapore — is four times the size of Central Park.
China's Zhengdong New District is around the same size as central London.
While humans have always intentionally built new cities, we have never built so many on such massive scales in so many places in so little time. This is a phenomenon that has all the makings of a movement that will shape the political, social, and economic trajectories of the planet in the coming decades.
China's Zhengdong New District, which is one of the most advanced and economically successful new... [+]
How many new cities are being built?
“New cities have a definitional problem, but according to how I am defining new city projects, there are about 100 under construction or being planned since the mid-1990s, not including China,” Moser estimated.
China is without a doubt the global epicenter for new city building, having established more than 600 new cities since the Communist Party came to power in 1949. While many of China’s new cities derived from what amounts to ambitious rezoning schemes — creating new urban-classified administrative areas from rural-classified areas — nearly all of what is now regarded as urban China was built up from scratch over the past thirty years (with marked exceptions being the historic zones of cities like Beijing, Shanghai, and Guangzhou). The best official numbers that we can get as to how many new cities China has really built comes from a 2013 survey conducted by Beijing’s National Development and Reform Commission, which found that in just twelve of China’s thirty-two provincial-level administrative divisions there were over 200 new towns under development. Nationwide, that number could easily be doubled.
Hallstatt China, an almost exact replica of the Austrian UNESCO hamlet.
Why new cities are being built
While some new cities are built to become new political centers, some are positioned to become new hubs of logistics, and others are designed to become new epicenters of trade, finance, or technology, they all share one common ambition: to be long-term engines of economic growth.
Flipping the 1990s-era script that urbanization is an economic scourge or social calamity, many countries across Asia and Africa are now viewing it as an opportunity (or at least a justification) to develop massive new cities — metaphorical gaming tables where billions of dollars are being won and lost.
Countries building these new cities also tend to be those which have rapidly growing middle and upper classes, are seeing dramatic improvements in infrastructure, skyrocketing GDPs, and newfound economic stability. In many ways, new cities are meant to provide the momentum required to keep these wheels in motion.
China's Lanzhou New Area as seen from above.
In this context, new cities are essentially giant blinking signposts which loudly proclaim, “We have arrived.” They are strategies to keep homegrown talent from migrating abroad, attract foreign investors and companies, rebrand the country as “modern,” as well as to extract the short-term spoils that can be squeezed out of real estate development.
“We are building Gracefield Island because the time for it has come in West Africa, particularly Nigeria,” sums up Olufemi Babalola, the driving force behind the project. “The time has come for a city that is sustainable, that addresses the housing and office accommodation needs of the future. People ask us, 'Why Gracefield Island, why are we creating an island?,' and we say that we are doing Gracefield Island on reclaimed land because we need a clean slate, a clean canvas on which to do what we are doing.”
It is often extremely profitable — at least at the onset — for governments to build new cities from scratch. Inherent to the creation of a new city is the creation of urban development land that can be sold to developers. We saw this fiscal strategy utilized in China to gaudy extents between 2002 and 2012 — the years of the country’s new city building boom. In 2000, land sales on average made up 9.3% of China’s municipal government revenue. In 2011, it was up to 74.1%. According to a joint survey between Landesa, Renmin University, and Michigan State University, China’s local municipalities were making 40-times more money per acre of land than they were paying to seize it for redevelopment. In the case of reclaimed land, we’re looking at profits in the 10 to 100-fold range.
“There is a widespread view that new cities are a crucial part of any emerging economy's toolkit for economic growth, yet very little research has been conducted to determine the extent to which this is true,” Moser explained.
The skyline of Pudong, one of the most successful newly built financial districts in the world.
Who new cities are for
In many cases, new cities amount to “city 2.0-style" upgrades over the historic urban cores they usual exist in proximity to. Rather than completely demolishing and reworking the often outdated existing city, the idea is to start over from scratch on a completely blank canvas of land nearby. These new urban expanses are often attempts to engineer-out many of the pitfalls of the cities they are meant to improve upon — promising better traffic systems, more sustainable resource use strategies, and cleaner living environments.
However, there is a social class element that cannot be ignored.
“Most of these cities are not for the poor or even for middle class people,” Moser explained. “They have luxury housing, golf courses, and other amenities that are expensive and energy / water intensive … further exacerbating differences between rich and poor, the consequences of which could cause more social instability.”
Hualing Tbilisi Sea New City is rising up in what was recently agricultural land outside of... [+]
The new city building movement that we are currently in the middle of is one of the most under the radar and most misinterpreted social and economic developments happening in the world today. Hundreds of billions of dollars are being invested as new dots are being emblazoned upon the map. These are the places in Asia and Africa's emerging markets that are being primed for foreign investment, these are the places where the money is flowing into, and as the global economy is trending more and more in an upward direction, look for more new cities to start resembling the economic engines they were originally envisioned to become.
“If you get the economic theme right — and I think the one who got it best was Alexander the Great, because some of his cities still stand today and are now very successful — then [a new city] will last for millennia," Herzberg concluded. "But if you don’t get it right, they will disappear.”
Colombo Port City in Sri Lanka. The land for this development is being reclaimed from the sea.