Inner Mongolia is the new Outer Mongolia

Inner Mongolia is the new Outer Mongolia

The city of Ordos is considered a ghost town. Now, the Inner Mongolia Autonomous Region city is hoping reducing its dependence on coal reserves can help it recover.

Unfinished condominiums and houses are everywhere in the Kangbashi New Area, an urban centre built by clearing the prairie. The landscape of Ordos, where people kept goats and used the fur to make clothing, drastically changed about a decade ago.

Ordos accounts for about one-sixth of China's coal reserves. The city rose as the national economy grew. Shenhua Group and other state-run and private companies flocked to Ordos and got rich developing mines to meet ballooning resource demand.

The local government, which benefited from increased tax revenue, also pushed forward with infrastructure investment. "Real estate prices kept going up," said a Chinese newspaper reporter. "Coal and realty investors looking to resell holdings quickly came to Ordos from across the nation." Then came the downturn.

Supply glut

A 4 trillion yuan (around $585 billion at the time) economic stimulus package Beijing mapped out after the 2008 collapse of Lehman Brothers Holdings triggered tough times. Every industry -- from steel to autos to home appliances -- suffered from excess production. By the end of 2011, coal prices were heading south. "Condo builders and buyers ran away," said a local taxi driver who goes by the name Zhang.

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