On the coast of Johor, a southern Malaysian state connected to Singapore by causeways, in 2016 China’s largest property developer, Country Garden, unveiled Forest City, a $100 billion mega-project under the Belt and Road Initiative. At the time, China’s property boom was in full swing and developers were borrowing colossal sums to build both at home and abroad for middle-class buyers.
For the Malaysian development, the company planned to build an eco-friendly metropolis with a golf course, water park, offices, bars and restaurants. According to the company, Forest City would have housed nearly one million people, but eight years later only 15 per cent of the entire project has actually been built and, according to recent estimates, just over one per cent of the total is occupied, as recent coverage by BBC, Foreign Policy, AD and more media outlets have illustrated.
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Forest City was initially presented to the market as “a dream paradise for all mankind”. In reality, however, from the beginning the project was only aimed at the Chinese domestic market, offering the possibility of owning a second home abroad — also considering that the selling prices were out of reach for most Malaysians.
But Forest City’s isolated location — built on reclaimed islands and far from the nearest large city of Johor Bahru — discouraged potential tenants and earned it the local nickname “Ghost City”.
Nevertheless, the developer insists that the current situation in the Chinese property market is just “noise” and that its operations in Malaysia “continue as usual”. It also stated that plans to include Forest City in a new special economic zone between Malaysia and neighbouring Singapore show that the project is “safe and stable”. But without access to liquidity, it is difficult to see how projects like Forest City can be completed or how they can attract people to live there anytime soon.
The fate of Forest City, as well as hundreds of projects across China, therefore depends on the Chinese government. Last month, it was reported that Country Garden was included in a preliminary list of developers who will receive financial support from the Chinese government, although the extent of that support remains unclear.
Opening image: Forest City, Jahor, Malaysia. Photo South China Morning Post