The revealing appeal of China’s cheapest city

CENTRAL planners have long shaped Hegang, a city in China’s far north. Once, coal and other minerals made Hegang a pillar of socialist industry. When the richest seams were declared exhausted, just over a decade ago, the central government closed many mines and put its faith in green infrastructure. Shanty-towns of soot-blackened miners’ huts were demolished and replaced with brightly painted apartment blocks, marching to the horizon beside new city parks. A high-speed rail line opened last December. There is proud talk of a graphite mine that will supply factories making batteries for new-energy vehicles. Alas for the technocrats, they could not prevent more than one in six locals leaving Hegang after 2010, fleeing low salaries, limited job prospects (especially for graduates) and long, dark, brutal winters.

Recently, that combination of a home-building drive and a shrinking population has propelled Hegang to an unforeseen distinction. It is by some measures China’s cheapest city at prefecture-level or above. In 2019 Hegang earned online notoriety after young outsiders made viral videos and blog posts boasting of buying sizeable apartments there for as little as 46,000 yuan ($6,700). The claim is supported by more formal surveys. Hegang’s second-hand housing stock sells for 2,152 yuan per square metre on average, making property 40 times cheaper than in Shenzhen, a high-tech southern metropolis.

This backwater of 790,000 people near the Russian border has now become an online byword for a place where strivers—as well as have-nots and misfits—can turn modest savings into a home. True, many give up and leave within months, often as winter temperatures plunge to -20°C. Others visit only briefly to decorate apartments bought online, before returning to lives in a factory dormitory as migrant workers in a giant eastern city. But even that remote form of ownership is “a form of emotional comfort” for migrants, who may spend years in Shanghai or Guangzhou but have no hope of buying homes there, says Liang Yunpeng, a Hegang estate agent. He sells perhaps 80 cheap flats a year to outsiders, typically on the upper floors of old buildings without lifts. His customers often have less than 30,000 yuan to spend.

It would be rash to predict Hegang’s revival by incomers. Several successful new residents supplement local jobs by creating short online videos and posts that play on the novelty of their move to China’s far north, earning millions of views for films about the cold or the cheapness of eating out. Only a limited number can become famous online for living in Hegang.

Still, this small city is a good place to observe a large trend. China faces a cost-of-living crisis. Between 1998 and 2021 urban Chinese homes became four times less affordable, as judged by the ratio of average housing prices to median disposable incomes. Today a flat in Beijing measuring 100 square metres costs, on average, 6.3m yuan, or about a million dollars. That is 34 times the average annual salary in China’s capital. Unattainable housing is especially painful because property is seen as a safe, government-backed form of savings, and because a man without his own apartment will often struggle to find a wife. It also exposes deep inequities in modern society. Some involve yawning income inequality. But others reflect encrusted privilege from the socialist era, notably after urban housing was privatised in the 1990s and sold off to state-employed workers and officials at steep discounts.

Visiting Hegang, Chaguan meets the owner of a small burger bar, surnamed Hou. He is locally born, and returned from Beijing in 2020 when the covid-19 pandemic halted his work as a guide taking Chinese tourists to Russia. Such holidays are not cheap: a family trip to Moscow might cost 30,000 yuan. Still, many of his clients were seemingly ordinary pensioners. The explanation is that long-time Beijingers might own two or three apartments, bought cheaply years ago. Now even a small flat can generate 60,000 yuan a year in rental income. In contrast, Mr Hou has noticed more Hegang friends heading home, after realising that—as migrant outsiders to a big city—they will never have enough capital to buy a home or start a business. He is glad to hear more customers or delivery-scooter riders with non-local accents, too. For one thing, such newcomers prop up Hegang housing prices.

Some locals resent Chinese bloggers who call the city a haven for those yearning to “lie flat”, or drop out and abandon material ambitions. Wang Dakai, who spent ten years in big cities before returning to open a barber’s shop, worries that Hegang is being called lazy. “None of us is lying flat, everyone is hustling,” he says. Proving his point, as his price for answering questions he asks to film an online video pretending to cut his British visitor’s hair to post on his social-media channels.

Individual dreams in a bastion of old collectivism

Some fresh starts are life-changing. Buying and renovating a flat for 70,000 yuan last summer allowed a 25-year-old vlogger who uses the name “Hua Hua” to make a home for herself and her ten-year-old sister. Each month she sends money to pay for her mentally impaired mother’s care at home in Jiangxi province, 3,000km to the south. She supports herself by selling pancakes and bean jelly from a street cart, housesitting cats, working as an online customer-service assistant and writing. Hegang is quiet and friendly, and has some good schools from its days as a mining centre, she says. Also, she likes snow. On a recent morning she was joined in her tiny, cat-filled home by a newly arrived friend, a divorced single mother. The friend has noticed that many arrivals have strained relations with families, as she does.

No central planner set out to make Hegang a city where young women can enjoy rare autonomy, without a husband or relatives to control them. This cheap ex-mining town is best understood as an accidental safety-valve. Its startling fame reveals that Chinese society is a system under terrible pressure.■

Read more from Chaguan, our columnist on China:
Why Chairman Mao’s victims are denied justice (Mar 16th)
What party control means in China (Mar 9th)
Why aren’t China and America more afraid of a war? (Mar 2nd)

Also: How the Chaguan column got its name