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China Takes The Property Bubble To A Whole New Level: An Explosion Of (Vacant) Inland Cities Is Coming
As if documentary material of what happens when China builds one ultramodern city in the middle of nowhere (hint: it exists in a ghastly void, where it remains completely empty - but that's ok: at least it kept a few million Chinese construction workers employed and "boosted" the country's GDP courtesy of another trillion in underwater loans) was not sufficient, Reuters has prepared an exhaustive special report on how China plans to move forward with the next leg of its housing market titled: "China bets future on inland cities." It is a stunner, and it demonstrates that far from tackling its housing bubble, which as we disclosed previously has already resulted in about 65 million vacant homes, is pushing on blindly without regard for the consequences, and is on the verge of taking bubble mania to a whole new, previously unseen level.
From Reuters:
Special Report: China bets future on inland cities
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China has put big money down on a momentous gamble: rush to build new
cities in its poor interior, then wait for people to come and help drive
the economy to a new stage of growth.
Chinese hinterland, the government has widened farm lanes into highways,
turned wheat fields into an industrial park, spent a fortune on
government offices, and set up a school for thousands of students in
what was a dusty town a few years before.
cracked gravestones have been bulldozed to make way for a housing
estate featuring 60 apartment buildings, a winding creek and tennis
courts, the latest such development in Gushi.
the roads are mostly deserted apart from the odd goat herd trundling
along them. The industrial park features a handful of workshops and no
big factories. Vast new housing estates fan out from the original town
center, most of them uninhabited. Skeletons of half-built villas,
stained from neglect, are splayed across fields.
1,000 km (600 miles) south of Beijing in Henan province, Gushi is a
microcosm of this latest face of China's urbanization, featuring
ambitious officials, angry farmers, countryside capitalists, a new batch
of consumers -- and empty buildings.
the past three decades, rural migrants flocked to big, prosperous
cities along the coast. Now, in its revamped model of urbanization, the
government is trying to bring cities to its farmers, a project that
could absorb more residents than the entire population of the United
States in the coming decades.
is my land, but now it's all been sold," said the wiry, sun-beaten
Xiang, eyeing a row of apartments under construction advancing toward
his hut. "I won't leave until they give us the right money for moving,
not just a few coins."
apartment complex encroaching on Xiang's land is part of a vast urban
development juggernaut that has become a new engine of economic growth
as global demand sputters. It offers enormous opportunities for the
companies that dig up the raw materials needed to build the new cities;
that make the cars for the new roads and the washing machines for the
new homes.
with ample scope for disappointment. If the unprecedented population
shift from villages to cities is mismanaged, it could squander
resources, radicalize peasants and damage China's prospects.
1.7 million people, Gushi is the most populous county in Henan and one
of the biggest in the nation. Locals boast it sends out more workers to
cities than any other county in China.
annual flow from farms to factories is at the heart of how China's
economy, a welterweight in global terms in 1980, will become the world's
biggest in a little more than a decade.
are going to see smaller cities being created out of townships,
townships created from villages," said Jing Ulrich, chairman of China
equities at JP Morgan.
believe in the long-term thesis that playing this urbanization trend,
playing consumption growth on the back of urbanization and income
growth, this is probably one of the brighter spots in the global
economy."
to develop is the worst kind of corruption," Guo Yongchang said before
he fell from power as Communist Party chief of Gushi in 2008. "If you'd
prefer not to develop, and you don't get close to businesspeople, then
it's more evil than corruption a hundred times over."
sort of cockiness led to his downfall. He and another former head of
Gushi county have been accused of graft. Buildings for a new university
that went bankrupt stand abandoned. The town's main factory also went
bankrupt.
corruption and resisting the loss of farms have turned a strip of land
where their fields meet the expanding township into a protest
battleground.
force the farmers to sell the land for very little. Here there are no
controls," said Zhao Jiuzhou, a 24-year-old in jeans, watching local
farmers dig the foundations of a new apartment block.
you foreigners want to develop here in Gushi, it would be like
Cinderella being eaten by the big wolf," he added, mismatching his fairy
tales. "Here the officials can make a killing from nothing".
is not alone. Multiply its problems across thousands of towns and small
cities across China, and the risks of the country's headlong rush
toward urbanization become evident.
if the pitfalls are clear so is the potential. Between now and 2040,
China's urban population will expand by up to 400 million, according to
Han Jun, a rural policy expert who advises the government. In other
words, cities will absorb about 15 million new residents every year.
means growth," Stephen Green, chief China economist at Standard
Chartered, told Reuters Insider TV. "And it means better education and
health care. It means higher labor productivity and higher wages. People
living in urban areas tend to consume more. So this is really the crux
of China's transition into a wealthier, more balanced economy, and the
faster it happens, the better."
the window of Duan Guofei's new apartment, Gushi's ambition to leap
from sleepy town to grandiose city begins to look more plausible -- even
if it is not happening as fast as they might like in terms of creating
jobs.
live in Xiangzhang Garden, a housing development where many apartments
have been sold and real estate agents give tours to a stream of
prospective buyers.
apartment is decorated with soft-focus wedding portraits, and a large
flat-screen television sits across from their glass coffee table. It is a
far cry from the mud-brick village homes they grew up in. Duan's
parents were farmers and his wife's father a village teacher.
young couple is part of a generational shift in rural China. They have
worked in far-off cities, too costly and officially unwelcoming to offer
them a permanent home, and yet they feel too attached to urban life to
return to their home villages.
you used to build a house in your home village," Duan said. "Now
everyone is buying in the county seat. All my parent's relatives have
moved here, because life is so much easier."
which lies in a remote corner of Henan province bordering on rural
Anhui province, is an intense example of how migration has transformed
the Chinese countryside.
500,000 of its 1.7 million population work elsewhere as migrants in
factories, shops or offices or as merchants, said Cai Liming, deputy
head of the county propaganda department. The county government is
betting it can draw these migrants back to buy homes, invest their
savings and create jobs. But many find only disappointment when they
migrate back.
here but the wages are lower," said Wu Anxia, who moved here from
Shanghai to ensure her son went to a decent school, because government
restrictions barred children of migrants from good ones in Shanghai. "I
was a warehouse manager in Shanghai," Wu said. "But back here in Gushi,
there's nothing. So I became a cleaner."
the first phase of urbanization, from the start of the country's
post-Mao reform era in 1978 to the present, rural citizens began
migrating to booming coastal towns from Tianjin in the north to Shenzhen
in the south. About 140 million made the trek last year.
of these migrants stay on. The hukou system of residency registration
deprives them of benefits, such as public education, away from their
home villages. Only 19 percent of rural migrants had settled permanently
in cities as of 2004, according to the National Bureau of Statistics.
the new phase of urbanization, the government's strategy is not to move
farmers to big coastal cities, but to draw them to new urban areas in
the hinterland. Its clearest expression came in the Communist Party's
No. 1 Document in January, a policy blueprint for 2010. In it, China
vowed to reform the hukou system by giving rural citizens the right to
the same services as urbanites -- but only if they move to small cities
within their own province.
the country will have 221 cities with populations of a million or more,
compared to 35 in Europe, according to a report by McKinsey & Co,
the consultancy firm. China had 108 such cities in 2004.
whereas work awaited migrants who flocked to factories on the coast
over the past two decades, the creation of cities and employment by
decree in the interior is less of a sure thing.
was not much success because of the limited employment opportunities
and poor public services in small cities," said Tao Ran, an economist at
Renmin University in Beijing. The modern furnishings in Duan and Rang's
apartment in Xiangzhang Garden cannot gloss over Gushi's shaky
prospects for creating lasting jobs. Duan earns about 2,000 yuan ($295) a
month decorating homes. But officials fret the property sector, the
pillar of the town's economy, will suffer as empty apartments pile up.
man who presided over Gushi's transformation now waits out his days in a
detention cell. Guo Yongchang was the Communist Party secretary of the
county for four years, before his fall in a cloud of corruption charges
last year. One of his subordinates, Fu Kongdao, the deputy head of the
county in charge of land decisions, committed suicide in early 2009.
ambitions for the town, and for himself, are visible across Gushi, and
so are the costs. They are seen in the 10-storey polished stone building
that dominates the new government compound, in the expansive square
next to it, and in the unfinished villas marooned on once-fertile
farmland.
the county seat, they still couldn't fill all these homes," said Zhou
Jun, a taxi driver, as she drove past acres of unoccupied and neglected
apartments. Zhou says she can tell which apartments are empty by looking
for the air conditioner units outside windows. If they are missing, no
one is living inside. Her car passes one building block with 72 windows,
just two with air conditioners.
the curt official announcement, the reason given for Guo's dismissal
was corruption at a post before he became boss of Gushi. But residents
believe his misdeeds continued, and grew enormously, when he was head of
the county.
took too much. Here, you could take land, sell it cheaply and make
millions," said Ren Jun, a small-time investor in the Gushi property
market.
with bright hopes for himself and for this town. With his credentials as
a lawyer and reputation as a hard-driving official, he itched to launch
Gushi and himself onto a bigger stage by working hand-in-glove with
local capitalists. "Run the government like it's a business. Run a city
like it's a commodity," Guo once told Decision Making magazine, a
Chinese business publication.
was not shy about putting that philosophy into practice. When a local
businessman opened a luxury bathhouse -- one of many such businesses
across China where businessmen and officials go for saunas and massages
-- Guo made sure he and other senior county officials turned up for the
ribbon-cutting ceremony. "We must treat businesspeople better," said
Guo, according to the 2005 magazine interview. "We've got to bathe with
them."
cheap land, and lots of it, defying repeated efforts by the country's
top leaders to slow land grabs for development.
central government has told local governments to entirely freeze land
(requisitions), so we must speed up land seizures and seize up to 10,000
mu (1,650 acres) of land. Otherwise, what will we have to develop the
city?" Guo told officials, according to a report in the Southern
Metropolitan Daily, a Chinese newspaper, in June of this year.
of that land went to two vast housing projects -- Phoenix New Town and
Xinhe New Town. In return, the developers provided the county government
with a stream of revenue that helped pay for new office buildings and
monuments.
building sits the county outpost of China's central bank. Its carved
stone walls and a fountain covered in stone frogs look as if they were
torn from an aristocratic European manor and plopped on the plains of
Henan. An equally ornate museum, celebrating Gushi's small role as a
cradle of the communist revolution, stands empty by the square.
better days, Gushi's transformation from poor backwater to an
urbanizing model brought Guo and his government kudos and admiring
visits from senior officials. Among them was Xu Guangchun, the Communist
Party secretary of Henan province, who told Guo the county had set an
example for the province to emulate. "Your ideas are golden," Xu told
him.
of this urban charge is being led by officials aiming to literally
leave their mark on the landscape, boosting their career prospects and
sometimes their personal wealth. China's worry is that the troubled
trajectory of Guo Yongchang is being duplicated, in some way or another,
in cities and towns across the country.
officials have huge powers over land and investment. But in their
ambition to transform dusty towns into aspiring cities, they are leaving
behind worrisome levels of government debt and a model of sprawling
urbanization that will exact a toll on the economy and society over
time.
perverse incentives. Local governments in China have become "hooked on
land," in the words of Tao Ran, the economist at Renmin University. A
reform of the taxation system in 1994 shifted the lion's share of tax
revenues to the central government and left provinces, cities and
especially towns with bigger burdens. Over time, they saw that land
could plug the gap. Seized cheaply from farmers, it is sold for a tidy
profit to developers, many of whom count on cheap funding from
state-owned banks to bankroll their construction projects.
finances are in good health, at least in official terms. The government
says its total debt is just 20 percent of gross domestic product,
compared with about 80 percent in the United States and nearly 200
percent in Japan. But officials acknowledge the picture is grimmer when local government debt loads are added.
legally barred from borrowing, provinces and cities have found ways
around the restrictions, often through government-backed investment
firms. These financing vehicles have borrowed a total of 7.7 trillion
yuan ($1.1 trillion) from banks, according to the China Banking
Regulatory Commission. That alone would about double the national debt,
and some suspect the total is higher. Realizing the potential scope of
the problem, the regulator warned banks at the start of this year to
limit their lending to local governments.
years, Gushi had been running full tilt in the opposite direction,
trying to find ways to catalyze investment and escape restrictions on
local debt. Some of the spending that Gushi routed through its financing
units may yet prove worthwhile.
a list of development projects for 2009, the County Construction
Investment Co was named as the developer of a water supply plant. It was
also listed as the main investor in a hotel and entertainment complex, a
questionable need in a town that already had a new hotel and few
visitors.
land and money litter Gushi's landscape. The abandoned "Heyuan
University" campus sits on the edge of town, sinking back into the
fields that were taken to build it. A couple of guards mind the
crumbling buildings after the investors fled a couple of years ago.
run away and left us with these rotten buildings," said Fu Jinzhi, a
wrinkled woman in her 70s living in a village near the campus. "We've
been hurt, but what can we do?"
accommodate the onrush of new city dwellers, the country will have to
pave 5 billion square meters of road, construct 5 million buildings,
including 50,000 skyscrapers, and add up to 170 mass transit systems,
the McKinsey report said. All by 2025, it added.
has happened so quickly that the cities have not had an opportunity to
grow organically. And there is a real risk that what you are going to be
left with is these cities that are very sprawling," said Arthur Kroeber
of Dragonomics, an economic consultancy in Beijing.
thought is given to energy efficiency or quality of life by officials
whose main objective is to build and build some more, he said.
Chinese officials have started to muse about the need for slower
economic growth, down from the double-digit pace which has been the norm
for much of the past decade.
slower pace of growth might well be beneficial, because when everything
is booming, no one has any incentive to do anything at all carefully,"
Kroeber said.
Party Secretary Guo was the force behind Gushi's feverish excess, Chen
Feng was the man who did the heavy lifting. But while Guo now sits in
jail, Chen has catapulted himself into the ranks of Henan's business
elite.
Estate, Chen is Gushi's biggest property developer, the man who has
built the homes for migrants who have returned with money and
middle-class aspirations.
center of Gushi stand three Xinhe developments, modern, sleek, and
carefully landscaped. Chen's latest project, Golden Sun, is a
60-building housing estate.
most successful real estate barons in China, Chen's government
connections run deep. He has been a member of the county parliament and
has made Xinhe a virtual handmaiden to official development plans,
building 6 sq kms of government offices and public facilities, including
schools. Xinhe knows the schools are a big selling point. Each family
buying an apartment in Xiangzhang Garden is promised a 20 percent
discount on school fees.
is one of the yawning gaps between rural and urban China that have made
the interior so unappealing -- a place that people aspire to leave.
the pattern across all of the country," said Li Changping, the rural
affairs expert. "Officials are concentrating school spending in counties
and large towns, so then parents are forced to move to them for the
sake of their children."
successful businessmen in China, Chen has been nimble, too. Over the
past year, as Gushi tried to change its development strategy after Guo
was detained, Chen tried to change Xinhe's focus.
company has answered the government's call to build a strong
industrialized county, and we have made a strategic shift in the company
from a real estate developer into an industrial firm," Xinhe said in a
statement in June, marking its investment in a factory for medical
infusion bags.
growing stature in official eyes, the company was rechristened this May
as Henan Xinhe Construction and Investment Group. The insertion of the
province's name came with explicit government approval and will make it
easier for the firm to win contracts beyond Gushi.
potent cocktail of state power, big money and heady urban ambitions can
be seen across China, especially in the rural hinterlands.
is one of the poorest major provinces, with just 36 percent of its
population living in cities. The province has made rapid expansion of
cities a cornerstone of development.
the largest city in southern Henan, has built an 18-storey headquarters
for its Communist Party officials overlooking a vast square. City
leaders believe the imposing government buildings will attract more
investors, the mayor of Xinyang, Guo Ruimin, told Reuters.
grey expanse of concrete with low shrubs around its edge was not a
public square, he said. "It's a botanical garden planted with many
flowers."
over a million residents about two hours drive from Xinyang,
multi-storey apartment and office buildings have mushroomed in the new
"high-tech" development district.
are pretty buildings, but when you're as old as I am, you get dizzy
just looking at them," said Xiao Chunqi, gazing at a cluster of four
30-story apartment buildings rising next to her village in Nanyang.
law says farmland is collectively owned by villages. In reality, the
land is controlled by local governments. They, not the farmers, have the
power to decide who can turn fields into real estate. Farmers say land
reclamation rules are fixed against them, giving officials and
well-connected developers the power to push them off the land without
fair compensation.
trouble facing urbanization is the waste of land, because in China it's
just too easy to take farmers' land for a pittance," said Dang Guoying, a
rural development expert at the Chinese Academy of Social Sciences who
is studying the challenge of urban growth. "So our new cities have these
broad roads and big parks, townhouses -- such a waste of land".
path of urbanization that China has pursued over the past 30 years is
no better than the slum development of Latin America and India," wrote
Zhou Tianyong, an economic and social researcher at the Central Party
School, a leading institute in Beijing. "Moreover, if this path of
urbanization is not adjusted and continues, the outcomes will
undoubtedly create much social turmoil," Zhou wrote in a recent overview
of urbanization.
of that are not hard to find. Some protesters are demanding political
and economic reforms that could challenge the top-down control of the
ruling Communist Party. (Click on xxx for related story)
land defense movement in Gushi is like a rising wind," said one
petition from disgruntled farmers. "Wherever there is oppression, there
is also resistance."
veteran protester in Gushi, disclosed plans for a nationwide campaign
to link up disgruntled farmers demanding a better deal from the loss of
their land. He held out pictures that he said showed battles over land
involving dozens, sometimes, hundreds of villagers.
reckless development in my area has been slowed, but it's because of
farmers' resistance, not because of government orders," Zhou said. The
land system needs to be reformed so farmers can decide whether to sell
their land -- and reap the benefits themselves, he said.
even the discontented farmers could see no way of stopping a tide of
urbanization from engulfing the countryside. Many of their sons and
daughters are moving to factories and apartments, while they stick to
the barricades.
inevitable trend. It's not whether you want it or not. There's no
choice," said Zhou. "But this urbanization path is a deformed bubble."
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And we thought they were SO smart....silly Chinese.
Did their grads come from Bernake U?.
Isn't this exactly what Tim Geithner and US administration been demanding off the Chinese -- create domestic demand? They have clearly taken our advise to heart!
Hmmm....
Build cities that will be occupied sooner or later by an ever growing chineese population OR hold on to those US$ that will sooner or later be worth nothing?
A building need to be occupied or it decays quickly. If these places remain empty for ten years it'll be cheaper to build a new place than to rehab the old. A lot of people are buying investment properties that will only decay back into the earth.
But, but..."If you build it, they will come!" Hollywood said so!
US rural dwellers went through flights to urban areas, too, but there were generally opportunities waiting for the people. In China, people are waiting on opportunities, which haven't materialized. This can only end badly for the Chinese government.
"but there were generally opportunities waiting for the people. In China, people are waiting on opportunities,"
Well said Edmond.
Also goes to show that the system is totally upside down. On it's head as it were.
My instinct tells me that all this overbuilding (world over) has been done for areason we do not know/understand yet. No simple answers in complex time, Ocam's razor ad all notwithstanding.
ORI
http://aadivaahan.wordpress.com
Food? We don't need no stinkin' food!
Isn't one of China's historical strengths its ability to grow food here, there and everywhere?
So where does the food come from when 'everywhere' has factories and apartments on it?
Dr.
No, China has a severe issue's with food growing.
They have to import most all of their Potash,( a major ingredient in fertilizer), and their soil generally sucks.
This is one reason they are on a global buying, stock piling spree...........
Coming to a theatre near you: "Faminization (this time, it's coming for you!)"
This event rated PME (pretty much everyone)
LOL at the idea that China and other "developing nations" are going to lead us out of this Depression.
China is a mirage, its growth fueled by unsustainable consumption patterns in the West, unsustainable outsourcing of manufacturing, and unsustainable centrally-planned projects like the empty city of Ordos.
When the China bubble finally pops, expect violent revolution and bloodshed on a massive scale.
Another unsustainable: they can barely provide food and water for their population now.
Yes. I'm relying on this. A new Chinese empire will be rising from the chaos (great civilizations are reborn cyclically, like phoenixes), and those slant eyed, rice farming, pig eating chinks will need a new emperor.
The question is, what form of "liberty" shall be sold to the common Chinaman? Obv not communism, nor capitalism, for both will have been proven failures to commoners worldwide (they are quite unaware that Chinese communism and American capitalism are both simply advanced forms of fascism, hilarious).
Perhaps a new form of extortion is necessary.
Vacant inland cities is a best case scenario.
The central government is very concerned, and rightfully so, that civil unrest will follow the despair of all those who left the countryside to head to the cities for work.
Civil unrest, when your population is over 1,000,000,000, is a very serious thing.
Especially when your entire recorded history is punctuated by civil wars and revolutions that routinely claim 20MM lives...
Don't forget that there aren't any young woman left to marry because of the one child policy leaving millions of young men unwed and unemployed. So the question remains, does China focus its discontent internally or externally?
Historically, China focuses its energies inward, for good and for bad.
Let's hope the pattern endures, because I'd rather not be on the receiving end of whatever 1.5bn angry peasants decide to unleash...
I've been making the same point for years. The numbers are absolutely staggering. I mean what do you do with 100 million extra men? Clearly they will try to focus the discontent externally, right? Some false flag operation that allows them to draw __________ into war. It doesn't even have to be a war they can (or want to) win... just something that can cull the herd.
North Korean gals are gonna start looking mighty fine to someone...
You could seize much more land and natural resources going for Russian gals, an advantageous gal/sqm ratio all the way till the Urals.
For developed land, rest of continental S-E Asia would be a good choice.
Both destinations can be reached just by marching. The Great March 2012/2020/2045, in honor of the past Great Leader!
Hey, lets build cities and we'll find people who can afford to live in them later. That'll work well...
I am so fucking sick of that ass backwards commie pinko clusterfuck passing itself off as a country being touted as the future. Maybe I should form a country, brutalize my citizens regularly through torture and forced abortions, and then engage in every disproven mercantilist/marxist wet dream.
I won't even make Tom Friedman lick my genitals.
I would like to take a shit on Tom Friedman's face and then step on it.
Does that make me a bad person?
No, but it is a bit kinky. I'm just sayin'...
No need to do all that. You can just stay here.
China is bad, but getting better. The USA (until recently) was good, but getting worse. Personally, I'm not going to want to be here much longer. Whether I will want to go to China as an alternative is a big question mark. If they continue to adopt the policies that made Hong Kong into what it is today, I have no doubt that they will emerge as a land as great as America at its height. If they slip back into corruption and state control, then they will fall back barbarism.
No, I don't think the HK model is applicable to the mainland, a completely different ballgame.
HK mainly prospered because it drove its manufacturing offshore (into the PRC), and focused on being a financial services hub and gateway for investment into China. Plus, it had first-mover advantage for investing in China - a large percentage of companies, factories and projects in China are owned by HK concerns.
Plus HK's property market is the most volatile in the world, highly expensive (half the population live in govt. subsidized housing) and over-priced. This is not what the mainland wants or needs.
It will need to retain some semblance of a manufacturing base, unlike Hong Kong, and manage property levels down to an affordable level for stability/sustainability.
I agree though it could learn a lesson about transparency and weeding out corruption from HK, not that HK is squeaky clean, but it is a step in the right direction.
In the new phase of urbanization, the government's strategy is not to move farmers to big coastal cities, but to draw them to new urban areas in the hinterland.
Then I guess they just put all those farmers in black, mock-turtle neck sweaters and teach them how to put their fingertips together and say things like: "we're about e-business solutions..."
Gosh, they make it look so easy. The Obama Administration must be simply dripping with envy.
+ Version 4.0 LOL.
+∞ (and beyond)
They'll need those inland cities when the packed coastal cities are reduced to rubble by 300 million rioting laborers out of jobs and facing starvation.
Population control and urban renewal, in one fell swoop. And I bet they build them above the "sealevel+17m" needed to avoid inundation after Greenland melts (they are adding one coal-fired electrical power plant a week after all, so they know what's in store). It's all part of the grand plan.
I've said it before, and will say it again, that a new building in China has a half-life of only a few years. Their construction standards have been poor in recent history. What else can you expect from a political system that pays you wages whether you do a good job or a bad job? There's no incentive for excellence. That's why your Christmas lights don't work right.
This is bad for China, because those buildings will be like the projects in less than a decade. By the time the bubble pops, they won't even have any structures to show for it, at least by western standards. What's scarier is how fast they build them. The only thing worse than construction laborers under a communist system are construction laborers under a communist system and in a damn hurry.
Dubai (built by rural pakistanies) was even worse, 5 year old buildings looked like they were 30 years old. Sheet rock was falling off the walls, water would pour out of electrical sockets (how did they manage that?) and sinks would break off.
Shemp: "Hey Moe, no wonder the watta don't woik, these pipes is clogged with wiyas!"
I thought that was just their marketing genius. Makes me go buy a new set.
hey ....... tell me about it ! We've got our own "vacant cities" .......... I remember when DETROIT was a crown jewel of the UNITED STATES of AMERICA . My Dad & I used to go to the TIGERS' games in the 60's, watch Al Kaline & our country was OUR COUNTRY. Now, you go to DEARBORN, the IRAQ population that lives there are bleeding goats in their garages - - they aren't assimilating into any American culture ! ......... it's over here just as much as it's over in CHINA ....... we just have to go through the adjustment period.
Dude.... can't we relish in another's misery for just one thread :-)
And go Tigers (though the season is over)... my Tiger Stadium days was the 70's.
What you say is true... sad. The west, east and south asia has been lost to the globalist. Sooner or later nature will force a return to natural diversity not manufactured utopia.
Historically there is nothing unusual in building cities in the middle of no where and then populating them, most Kings of the past did this on a regular basis. Antiochus the Great, Alexander the Great, and Byzantium to name just a few. The plan might work if the capital used had not been borrowed but was from the national treasury. These people have no idea how to build a progressive system.
Brazil with Brazilia. I believe they give large incentives for the populus to populate brazilia. No doubt the same thing will happen in china: incentives to move there.
I don't know about the other two, but Byzantium most assuredly was NOT built in the middle of nowhere. It was built on the most strategically important scrap of land in the Mediterranean, only beaten in importance by Gibraltar 1500 years later, and by Suez a hundred years ago.
And one other point: the Chinese are sitting on a huge stockpile of foreign reserves. They can apply that capital at any time.
Leo K says chinese drywall manufacturers are the next chinese solars. Buy buy bye...
Sounds like they'd be great Scifi Movie sets...
I love all these hyperbolic comments from people who have never visited China. Stop listening to fools on the internet and go visit the place. What they have done in 20 years is beyond what any country in the history of the world has done. They will have problems but in the end they will still eclipse many Western countries. The days of colonial conquest are over. The West will be unable to steal it's way to prosperity.
So Anarchist, you say I should "stop listening to fools on the internet"?
Should I start before or after your comments?
Your choice. Ever been to China? Take a few weeks and travel around the country. What is hapening there and in many of the developing countries is not a mirage as many on this board want to believe.
It's important to realize that China didn't "do" anything -- advanced nations simply relocated their factories and technology to China.
If Boeing were to move to China (as they have threatened), would you say, "Look at the amazing advances China has made in airplane technology! No other nation has progressed so far so quickly!!"
The US has not done much organically in it's history either. Slaves or poor immigrants built all the infrastructure and grew all the food all the way up to the 1890's. The US produced almost zero great scientists in the first 250 years of it's existence. Western and Eastern Europe was the birthplace and place of education of the vast majority of the best scientific minds of the 18th, 19th and 21st centuries.
If the US was occupied for the last 200 years of it's existance like China had it would not be in it's present state of advancement. As it is the majority of knowledge the US has can be traced to European immigrants.
Where to start?
250 years? The US declared independence 234 years ago. Or are you counting when a few dozen men landed in Jamestown and being ridiculous in that way instead? Additionally, the EU has 700 million citizens to the US's 300 million. You better be producing over twice as many great inventions if you want to justify your individual-scientific-achivements-as-a-measure-of-a-civilization's-worth metric. It does say a lot that you're comparing an ancient continent to a young country, though.
I don't even understand the claim that "the majority of knowledge the US has can be traced to European immigrants." Like what? The US should also lay claim to at least a large part of the achievements by first-generation immigrants (and absolutely everything second- and beyond). If those migrants valued Europe's intellectual and business climate (or either of its World Wars) they would have stayed there, period. "Birthplace" is irrelevant, and "place of education" (as though all learning takes place in school) means little if the educated perceive few appealing areas in which to apply their skills.
And I don't intend to address the sinister institution of slavery, but do you really, really expect infrastructure and agriculture to be performed by the well-educated or the upper class? Since the world is full of people with no education and a willingness to work for less, shouldn't we strive for an educated citizenry that can do more specialized work? You simultaneously complain that the US isn't doing enough scientific research or manual labor.
And China is the world's oldest continuous civilization. Yes, they've been conquered by foreigners before, but most of the damage has always been internally inflicted. The last time they were decimated, it was because they were already at war with themselves. And by whom was China occupied over the last 200 years? They've been ruled by the KMT or CCP since the early 1900s, and before that rule was dynastic. Those were all Chinese political entities (with the exception of a few Mongolian emperors and such), and weren't occupations.
I did visit and travel around.
My take:
http://willanystand.blogspot.com/2008/12/dragon-on-winters-eve.html
There is a lot of truth to what the author of this article says. China is basically an old west boom town on a grand scale.
The West will be unable to steal it's way to prosperity.
That statement hurts my feelings man! Are you saying we are in Iraq and Afghanistan for any reason other than to spread democracy!
Uh, dude, 2004 ended, like six years ago. If you're going to spout cliches, at least use the up-to-date ones, please.
@Anarchist
They will have problems but in the end they will still eclipse many Western countries.
I agree with this, however it's the cheerleading that China will save the world tomorrow that I don't agree with. These probleam are big ones and will take a long time to overcome.
Very few think China will do anything except act in it's own self interest. The future wars the West plans to launch against China will slow it down but in the end it will wipe many of the Western powers off the world stage.
There are a lot of the elements here of Mao's forced relocation of millions of city dwellers to the countryside, only in reverse, and I expect with just about the same results. Clearly the Beijing bureaucrats understand rural China just about as well as the DC bureaucrats understand American culture west of the Potomoc. So, empty cities, no jobs, bulldozed villages, far less farmland than before. A prescription for massive failure and, almost certainly, a peasant revolution. yesterday Tianamin Square; tomorrow hundreds of empty cities burned to the ground.
I met a traveller from an antique land
Who said: Two vast and trunkless legs of stone
Stand in the desert. Near them, on the sand,
Half sunk, a shattered visage lies, whose frown
And wrinkled lip, and sneer of cold command
Tell that its sculptor well those passions read
Which yet survive, stamped on these lifeless things,
The hand that mocked them and the heart that fed.
And on the pedestal these words appear:
"My name is Ozymandias, king of kings:
Look on my works, ye Mighty, and despair!"
Nothing beside remains. Round the decay
Of that colossal wreck, boundless and bare
The lone and level sands stretch far away
You have no clue how to develop a resource efficient society. The goal of most developing countries is to move people into major population centers where they can cheaply travel to work and be efficiently supplied food and energy. All countries will move to huge industrial farms for maximum efficiency. The US screwed itself by moving huge numbers of people to suburbia.
Great opportunity to buy now and beat the rush as the US population flees to a land where there is still some semblance of opportunity.
Of course, if these guys really wanted these cities to develop, they would adopt the Hong Kong model, and reduce government interference in the local businesses to near zero (thus putting a quick end to the corruption problem--you can't corrupt what has no power, and if you could, it wouldn't matter).
China will save the world, or destroy it. The US has taken the course of destruction, and the Chinese are in the best position to save the world and profit by embracing freedom and free markets. They have done the latter on a limited basis. On the former, the US has sunk to their level. It won't be too long before China starts looking awfully good, assuming they walk the right path, which is far from guaranteed.
Of course, if these guys really wanted these cities to develop, they would adopt the Hong Kong model, and reduce government interference in the local businesses to near zero (thus putting a quick end to the corruption problem--you can't corrupt what has no power, and if you could, it wouldn't matter)
Did I miss your sarcasm?
The entire Chinese system works on guanxi and payoffs. Just as the American political system relies on patronage (earmarks are a form) and legal lobbyist campaign contributions protected by the First Amendment. (Leave out Abramoff and his ilk for the moment).
Who exactly is paying off the Government officials in your view? It is not the Chinese farmers just as it is not really the small individual contributors that elect politicians here.
This is one to sit back and watch with a bag of popcorn. The PRC will start to boil like a field of fire ant hills if they don't keep those men employed or 'down on the farm'.
They are screwing their People royally. The Chinese Lao Bai Shin (Lit. 'Old Hundred Names', the good old boys, salt of the earth, etc) have an enormous amount of bred-in passivity and resignation - up to a point.
Another quirk in the race - you give them an iota of Official power and they quickly employ it to grind their heel in the face of someone lower on the ladder than they. I have seen it repeatedly in my trips there.
That said, I always have a fascinating blast of a time whenever I am in the region - there is an energy in the big cities that must have been in, say, NYC in the 1920's.
Shills are posting China deflation stories similar to the idiot Chanos' rants everywhere on the Net; traders who listen to these shills are the greater idiots, since the shills talking down Copper and Crude oil with these China deflation stories represent traders who are clearly losing money: Copper and Crude are both strangely at multi-month highs. The fact that Chinese deflation is bullshit is staring at you from your quote screen.
If you believe Benjamin Fulford, China isn't just building empty cities above ground(!):
(And yet they can't get coal out of the ground without losing several thousand miners a year.)
Fulford has to be right cause hes backed up by like 100,000 ninjas!)
I bet he thinks he's Benjamin Franklin reincarnated.
haha my first post..
....wont be my last.
The cities will just deteriorate before they are even occupied. This is nothing but a spin off of our housing bubble except we found enough suckers to buy them and created a ponzi market to finance them. I don't think the Chinese people will be as stupid as greedy Americans were. I'm still waiting to see some tenants move into the South China Mall? It's been 5 years and that place is already delapidating. Maybe that's the reasoning, build a city around the mall and then people will shop? Either that or they want to shrink their population by having them die from the formaldehyde and the lead their construction materials put out. Pretty sick world we live in and I don't see it getting any better either.
http://www.pbs.org/pov/utopia/
Maybe they listened to the bankers and planned on having 50 "american" factories already there chugging away?
This is just like all the spec homes in my area sitting for almost three years, or the sea of condos in tijuana waiting for factories that have for, some reason, stopped multiplying like rabbits.
There was about 4,000 (I heard it was 40,000) protest last year relating to land grabs by local governments.
India has good GDP but no infrastructure and feces floating in the air everywhere. China has great GDP, future infrastructure and NO ONE living on the side of the road.
I have been to Erdos city and it is a nice place, yes mostly empty and economically apple orchards and coal mines. 64 million empty home is not a problem it is money in a safer place then the bank. If you owned 64 acres of land at this time you would feel safe (beans and tomatoes).
I have many friends in 3 different provinces and they all have more than one home. These are 30-ish year old double income families (engineers). Where else do you put your money when you are a saver? They do not want to rent it out, so beer fridge and mahjong tables on the cement floors. Its great we go there to drink Heineken, Duval and Chile wine and let the wind blow through as we watch the las Vegas style city lights (cottage).
China is like Buffet build when they are fearful and be fearful when the USA is greedy.
PS looking for used Italian and German made CNC machining centers (cash any currency)? Anyone in Michigan?
6 years here and getting fat
For all its' mistakes and gross negligence I think China is on a right track. It is investing in real assets for it's citizens, not complex financial 'instruments'. With a popoulation of 1.5bn that is mostly poor this is a good strategy, it keeps them as construction workers and related industries employed. And on the point of 65mil homes sitting vacant there is the cause and there is a solution. The cause, that is the root cause, is corruption which runs high. Thankfully China unlike USA can put the officials, that were caught with their hand in the cookie-jar, in prision. In the land of the free the same people are put on the cover of Time or, in the worst case, given a golden parachute to go under the radar.
And the solution, given China's ability to strong-arm it's businesses and officials alike, is also pretty simple. Once it senses that there is serious discontent brewing it can lay some of the costs on shark lenders (it's you fault, bitchez!) and shoulder some of the rest. People will be happy, the market is rebalanced, sharks smell blood of their kin in the water and go veg. Do you think it is a fantasy?
I had to sit and think about this for a while.
I grew up in a place where there were farms around the city for miles and miles to the next city.
Decades later both cities met when pavement and suburbs met and combined into a mega metropolis. Not a farm in sight.
At some point we are going to rediscover farming when we get hungry. I don't wish to be around when that happens.
Now.
Here is another thought.
Imagine what China did. Built a complete city for a million or so people somewhere quiet. Supposing that they do the job correctly and maintain this city ready 24/7 to accept evacuees and refugees when necessary.
Spare cities ready for anyone who needs a place. We could have used a few after Katrina.
Ah, that must be the new Rent-a-City business model I keep hearing about.
Yah, China can welcome refugees from Russia's fires for a fee each night from Russia's Government and keep the refugees comfortable while they get the fires cleared out.
Rent a city. What a concept. Imagine the income.
Or.... they can fortify the place and ship everyone who is not "Compliant" there and keep them there.
There's a lot more to this than meets the eye.
So I guess a lot of idiots now are believing just because there are 65 million vacant homes, there is no need for China to be building stuff.
Well that is one big time fucking idiotic viewpoint. The sad fact is China is a nation with 65 million vacant homes, and vast areas that are not developed. So yes, with 65 million vacant homes, China still has to build an absolutely fucking ton of shit in order to properly develop it's country. (and so do we)
I guess this is about the efficiency of the markets...how great is monetary imperialism that it can have a system that creates 65 million vacant homes in a country that needs so much development. Man I don't even think crap communism ever 'jumped the shark' that badly.
Yes the Western cities of china need development big time, especially water lines. Lots of infrastructure work needs to be done.
So yes China needs to build tons more stuff, they just need to stop building more residential units in already developed areas of China, and not build ghost cities per se.
LaRouche has some stuff on it
http://www.larouchepac.com/node/15444
China has a 1000 year view. We only have a 4 year view.
China can make babies way faster than we can bury our aging population or train young folks in health care.
Those cities will be populated before long.
Gotta love the smell of rotting capitalism in the morning.
Take a look at Detroit. All those vacant properties turned and demo'ed into grass lots and services suspended to entire blocks of empty grass.
It's like a cancer constantly rotting a city here in America from inside out.
A Visualization of China’s Bubble Economy