Vantage | How China left Malaysia stranded with a billion dollar 'ghost city'

In the southern reaches of Malaysia, the ambitious Forest City project was envisioned as a paradise, boasting reclaimed islands adorned with luxury facilities. From water parks to golf courses, Forest City aimed to provide every imaginable amenity. However, despite promising beginnings, the dream now lies shattered, as only a fraction of the planned project has materialised, rendering Forest City a ghost town.Launched seven years ago by the major Chinese developer Country Garden, Forest City was backed by a lofty commitment of $100 billion investment. The grand vision included a plethora of attractions, from a water park to a golf course, but reality falls far short of these aspirations. To date, a mere $4.3 billion has been invested and the project's future is hanging in the balance.Country Garden's strugglesAs Forest City languishes in a state of incompleteness, Country Garden faces its own struggles. The developer finds itself burdened with almost $200 billion in debt, experiencing losses, missed debt payments and a significant decline in home sales. In September of this year, sales plummeted by a staggering 81 per cent, casting a shadow over the company's future.With the turmoil unfolding, the Malaysian government has stepped in to salvage Forest City. Announcing the creation of a special financial zone within the project, the government aims to attract visitors by offering special perks including a unique income tax rate and multiple-entry visas.Uncertain future and financial crisisWhile Country Garden insists it is not abandoning Forest City, doubts linger about the project's future. Malaysia, facing the need for more investment, hopes to attract funds to revive Forest City. However, with Chinese developers grappling with a severe economic downturn including Country Garden's $390 billion debt and Evergrande's staggering $340 billion debt, the prospects seem bleak.China's real estate sector, which once thrived on large loans, is now grappling with oversupply, evident in the existence of ghost cities with an estimated 65 million empty homes. As 53 Chinese developers have collapsed in recent years, the sector faces unprecedented challenges. The overreliance on loans and an excess of unsold homes leave Chinese officials with limited options to resuscitate failed projects.The story of Forest City serves as a cautionary tale within the broader context of China's real estate market challenges. As the ripple effects of economic downturns and overleveraged developments continue, the fate of ambitious projects like Forest City remains uncertain casting shadows over the once-promising landscapes of southern Malaysia.Views expressed in the above piece are personal and solely that of the author. They do not necessarily reflect Firstpost’s views.Read all the Latest News, Trending News, Cricket News, Bollywood News,India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.