Tracing the Traces of China’s Rp1,627 Trillion-Built ‘Ghost Town’ Near Indonesia

JAKARTA – Built along the coast of the state of Johor, southern Malaysia, Forest City The 2,833-hectare, approximately 7,000-hectare site offers high-rise apartments overlooking Singapore, aimed at Chinese nationals dreaming of a luxury home on a sunny tropical island.

Complete with palm-fringed beaches and lush greenery, this futuristic metropolis has been in decline, hampered by economic controls, local politics and the Covid-19 pandemic.

Developed by troubled Chinese property giant Country Garden, the city’s developer is now trying to revitalise a place that is home to just 9,000 people in 28,000 homes.

Standing inside a nearly empty grocery store beneath one of the high-rise buildings, Sun Qibin, a Chinese national in his 30s, said business had picked up recently but was still slow.

“There are more people coming from China now,” he told Al Jazeera, as a few people passed his ground-floor shop on a quiet November evening. “But in normal times, business is not good.”

Officially launched in 2016, the USD100 billion or IDR1,627 trillion project has seen luxury property prices soar as authorities have granted it duty-free status and tax breaks to make it attractive to mainland Chinese buyers.

Situated on the Straits of Johor with views of the Singapore border a 20-minute drive away, Forest City is expected to have a population of 700,000 people on four reclaimed islands by 2035.

However, China’s restrictions on outbound capital and three years of pandemic-related border restrictions have dried up demand and only 700 hectares, or 10 percent of the total project, has been completed.

Doubts grew when former Malaysian Prime Minister Mahathir Mohamad said in 2018 that foreigners would not be granted visas to live there. Forest City’s regional vice president, Syarul Izam Sarifudin, said the city was still “on track” but acknowledged that interest in the 5,000 unsold units was still lacking.

“For us, it’s still manageable. We’re still selling two or three houses a month,” he told Al Jazeera. “There’s still a sentiment of people wanting to come and enjoy the facilities… buy and live here.”

He said buyers from more than 30 countries had snapped up properties in Forest City, adding that it was likely that “up to 70 percent” of the properties sold so far had gone to Chinese.

The Cursed City

On an afternoon during a Malaysian national holiday in mid-November 2023, several hundred people were seen passing through the city’s main commercial area.

Many shops were closed, and most people headed to a nearby small water park or duty-free outlets to buy alcohol. Others were served by Mandarin-speaking staff in a sales gallery as they viewed a large scale model of the city, twinkling with lights.

Only a handful of restaurants are open, while tourists ride rented electric scooters along the beach where a lonely yacht is moored near signs warning against swimming due to crocodiles.

KGV International property consultant Samuel Tan said the high proportion of foreign ownership had hampered Forest City’s chances of success.

“Any project that is more than 40 percent foreign-owned is doomed to failure,” he said. “That’s because they don’t come here, they don’t occupy property here, they don’t spend money here.”

He said the project’s developers needed to attract Malaysians or Singaporeans.

Forest City estimates that 80 per cent of the town’s 9,000 residents are renters, many working in Singapore or the nearby container port in Johor, while the rest are homeowners.