China cracks down on ‘themed towns’ in a bid to stop local governments wasting coronavirus stimulus funds

A 10 billion yuan (US$1.42 billion) ‘Happy Town’ project was supposed to be an emporium of sex toys, but has now been shut down by the government

State planner said local governments should return to ‘rationality’, in a move to cut down on frivolous infrastructure projects

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Asian Games Town was one of multiple ‘themed towns’ designed by JC Group, a company which subsequently ran into legal problems. The government has now moved to shut such projects down. Photo: Handout

Published: 6:45pm, 2 Jul 2020Updated: 12:10pm, 3 Jul 2020

Local Chinese governments will no longer be able to build the extravagant and controversial “themed towns” that popped up around the country after Beijing’s post-global financial crisis infrastructure splurge, the country’s state planner has announced.

Instead, the government is demanding a return to “rationality” after a number of high profile failures added to concerns over regional economies wasting central government stimulus funds.

The National Development and Reform Commission (NDRC) said in a notice published on Wednesday that “fake themed towns” should be eliminated, and published a list of offenders who had built them. Those considered legitimate by the agency will continue to enjoy government support.

From 2016, the Chinese government had promoted the construction of these “themed towns”, which were supposed to dot the vast countryside with beautiful, liveable villages, while boosting local economies through attracting major investments.

Fishing boats line the riverbank in Yucheng, Zhejiang province, which was supposed to be the site for “Happy Town”, a themed project that was to include a sex toy shopping street, a sex exhibition centre and an “adult-only” hotel. Photo: Sidney Leng

But the initiative was plagued with gimmicks, scams, and poorly thought through plans, leading to massive levels of wasteful spending and empty or half-completed projects.

A 10 billion yuan (US$1.42 billion) project dubbed “Happy Town” was located in the city of Yucheng in the Yangtze River Delta. It was supposed to include a sex toy shopping street, a sex exhibition centre and an “adult-only” hotel, but is now home only to a smattering of grapes, mulberry trees and turtle ponds.

Last year JC Group, the private company behind many themed town developments including Happy Town, collapsed, raising concerns over fundraising and exposing the huge risks behind the country’s state-led, debt-fuelled development drive.

Dozens of senior executives from JC Group were detained by police in April last year on charges of “illegal fundraising”, leaving many investors scrambling to recoup their money.