The Other Side Of China's 8% GDP "Growth": Ghost Cities

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Thu, 11/12/2009 - 17:48 | 129016 J.B. Books
J.B. Books's picture

Love the shoes.......!! 

I won't be wronged, I won't be insulted, and I won't be laid a hand on. I don't do these things to other people, and I require the same from them.

Books

Thu, 11/12/2009 - 23:13 | 129335 Anonymous
Anonymous's picture

The 6.1% growth of China’s GDP in the first quarter, the lowest in the past ten years, would have been an impossible dream without the support of the 4.58 trillion yuan new lending from China’s banks.

http://www.chinastakes.com/2009/4/bank-watchdogs-see-risks-rising-from-6...

Thu, 11/12/2009 - 17:49 | 129018 nightfly
nightfly's picture

I'd rather have a new city that a richer GS! What have we gotten for our bailouts? Just huge bonuses for the banks.

Thu, 11/12/2009 - 18:01 | 129041 Divided States ...
Divided States of America's picture

Its not a good sign to see this but I think at least they are putting good use of the stockpiles of commodities they have and whether this is sustainable or not, the GDP effect is real. Also, in case something bad happens to one of the major cities, voila, there is a back up plan. Maybe the US should start doing the same thing and build some backup cities in case of something bad. At least it takes people and their own hands to buiild those cities, not bankers and their algo hft trading machines.

Thu, 11/12/2009 - 19:45 | 129148 Harbourcity
Harbourcity's picture

I agree.  What happened to doing infrastructure as a means to expand GDP versus throwing money at banks.

 

Thu, 11/12/2009 - 19:59 | 129158 Johnny G.
Johnny G.'s picture

+1

Thu, 11/12/2009 - 21:10 | 129232 cougar_w
cougar_w's picture

The report mentions also the Chinese buidling a trans-national railroad. Some of the $trillions we've given to the banks might have built a nice high-speed rail project across the country that would have served everyone and been a backup strategy for a day when the jets don't fly anymore.

Ah, the road not taken.

cougar

Thu, 12/16/2010 - 17:39 | 812520 zero-g
zero-g's picture

I caught that too, sounded way too rational and far-sighted for the US though. Ever read about the Deep Underground Military Bases? Check it out, they have high speed underground transportation systems, but the military always gets a blank check.

Thu, 11/12/2009 - 17:52 | 129020 rtalcott
rtalcott's picture

http://current.com/items/90940241_first-solar-to-start-largest-solar-pow...


Ordos City in China signed an agreement to build what will be a 2-gigawatt solar installation in the Inner Mongolia city. First Solar has signed a memorandum of understanding (MOU) with the Chinese government to build a 2-gigawatt (GW) solar power plant in Ordos City, Inner Mongolia, China.

 

rt

 

Thu, 11/12/2009 - 17:54 | 129023 deadhead
deadhead's picture

what a video.....folks, you've got to see this one to believe it.

 

why you hat tipping yourself?

Thu, 11/12/2009 - 19:20 | 129136 deadhead
deadhead's picture

it might be part of the easter egg thing andy.

 

so, do we have yet another double top? or, maybe just the start of a new left shoulder lol!!

 

Thu, 11/12/2009 - 21:15 | 129235 Howard_Beale
Howard_Beale's picture

Let me know when you have it figured out DH--I'm thinking a quadruple top. I got swabbed 3 days ago after my temperature roared to 104 and tested positive for H1N1 and to add to the misery I have walking pneumonia--thus my absence for the last week.  Watching important television like Ramsey's Kitchen Nightmares and Holmes on Homes until I get better or we just start to crash because a) it is too painful to read and b) it is too painful to be awake. I highly recommend 103 degree fevers so you no longer give a damn about monetary policy.

Thu, 11/12/2009 - 17:54 | 129026 Anonymous
Anonymous's picture

No doubt the construction quality is as sound as the reasoning behind the construction.

Thu, 11/12/2009 - 17:55 | 129028 Anonymous
Anonymous's picture

Their consumers are helping that 8% though

http://video.pbs.org/video/1218530801/

Thu, 11/12/2009 - 17:58 | 129034 GlassHammer
GlassHammer's picture

I really love it when pundits profess their love for GDP and how its the best way to measure a country's economic strength. This is a perfect example of growth for the soul purpose of showing a nice GDP.

God forbid anyone actually use more than a cooked economic indicator to determine the strength of a country.

I almost laughed when the man they interviewed said "its too expensive to live here but maybe some other time". I remember being told that the Chinese don't bluntly say "no" but instead say "maybe later". So the man they interviewed really said "no we will never move here".

 

 

 

Thu, 11/12/2009 - 17:58 | 129035 rtalcott
rtalcott's picture

http://current.com/items/89867206_ordos-100-100-of-the-coolest-homes-bui...

The scope of the project is to Develop 100 hundred villas in Ordos, Inner Mongolia, China, for the Client, Jiang Yuan Water Engineering Ltd. FAKE Design, Ai Wei Wei studio in Beijing, has developed the masterplan for the 100 parcels of land and will curate the project, while Herzog and de Meuron have selected the 100 architects to participate. The collection of 100 Architects hail from 27 countries around the globe. The project has been divided into 2 phases. The first phase is the development of 28 parcels while the second phase will develop the remaining 72. Each architect is responsible for a 1000 square meter Villa.

Thu, 11/12/2009 - 18:56 | 129111 Anonymous
Anonymous's picture

Let the 100 flowers bloom!

Thu, 11/12/2009 - 18:01 | 129039 Green Sharts
Green Sharts's picture

Here's a video on the world's largest shopping mall, also in China, virtually empty.

http://video.iptv.org/video/1218530801#

Thu, 11/12/2009 - 18:57 | 129113 Ode to Trading
Ode to Trading's picture

Now that's errie. The idea of "growth" just for the sake of "growth" is so shortsighted. 

Thu, 11/12/2009 - 20:34 | 129183 bonddude
bonddude's picture

Freaky, makes that blog "Ghostmalls" look upbeat !

Anyway, Guangdong is supposed to be their big growth story. So all that solar stock hubbub is falacious ?

Thu, 11/12/2009 - 21:08 | 129228 Anonymous
Anonymous's picture

Excellent reference, China is West problems squared. Which means when the dirt hits the fan they should love the west even more than they already do.

Love the military lineup monthly employee meeting.

Good times.

Thu, 11/12/2009 - 23:52 | 129358 Spitzer
Spitzer's picture

West problems squared ? How many cities and railways and malls could you buy with 2 trillion $$$$ ?

Fri, 11/13/2009 - 00:33 | 129379 Johnny G.
Johnny G.'s picture

+1

They should spend every rectangular green piece of paper they have on tangible goods.

Fri, 11/13/2009 - 00:55 | 129399 Jim_Rockford
Jim_Rockford's picture

Here's a nugget from the wayback machine ... see any similarities?

http://www.youtube.com/watch?v=LOHdER6aQYQ

Fri, 03/05/2010 - 17:43 | 255427 Anonymous
Anonymous's picture

One thing I never EVER forgot somewhere in government studies in the US is that there is one thing communism sucks at, BADLY, is accounting for market forces that always frustrate central planning's best efforts at making things happen as it's "supposed to." We're talking overcapacity, overproduction. CLASSIC! They have NEVER understood how markets are supposed to work.

Someone further down this posting area mentioned how employees are handling themselves with military precision or something like that - there's a reason for it. THEY WANT TO TAKE OVER THE WORLD! They build, build, build, they produce, produce, produce, and I fully expect them to eventually kill, kill, kill when they send 200 million of the damned army to take over the entire western hemisphere. Have you noticed their military budget has increased and gotten the attention of the asian partners?

Fire in the hole!

Thu, 11/12/2009 - 18:06 | 129047 Green Sharts
Green Sharts's picture

Australia should be feeling really good right now about their recovery that is driven by selling raw materials to China.

Thu, 11/12/2009 - 19:11 | 129129 Anonymous
Anonymous's picture

Deluded springs to mind.

Thu, 11/12/2009 - 20:11 | 129165 Johnny G.
Johnny G.'s picture

The Aussies never had the excesses, or population we did.  They have the population of New York spread throughout a country the size of the U.S.   They have almost no federal income tax.  The have tremendous resources, fertile land, and a very low crime rate.   They didn't need to print $2Tr to "save" their economy, and they didn't give houses away to people who couldn't afford them with 3% down payments then dump off the mortgages as AAA paper to the rest of the world.  Their recovery was inevitable.  China just helped accelerate the inflation in Perth (which is why they had to raise rates).

You're right, they should be feeling good.

Thu, 11/12/2009 - 20:40 | 129188 che
che's picture

australian government is not indebted that much is true. but consumer and corporate sectors are just as much in debt as in the USA or in UK. when China stops building ghost cities and bullet trains to middle of the nowhere, Australia will join the rest of the anglosaxon world.

Fri, 11/13/2009 - 00:39 | 129382 Johnny G.
Johnny G.'s picture

They believe corporate debt leverages their economy in a positive manner.  And I believe they're correct.  They only have government bonds so that they'll have a "risk free" benchmark to price corporate debt.  Seriously, if you compare Australia and Canada to the U.S. and Germany (I assume that's the Saxon part), you haven't any idea what's going to happen over the next generation.

Thu, 11/12/2009 - 20:46 | 129196 Anonymous
Anonymous's picture

Well, the Australian government does collect income tax. But unlike the U.S., there are no state and city income taxes. And the Aussies on average pay a very high mortgage in proportion to income (among the highest in the developed world, I believe). I still think it is one of the best countries on earth though.

Fri, 11/13/2009 - 00:42 | 129386 Johnny G.
Johnny G.'s picture

Actually, their property taxes are quite reasonable.  It's their State tax that approaches 35%.  There's also an ungodly VAT/luxury tax that pushes the price of a new Porsche Cab (911, 997, whatever you want to call it) in excess of AU$200K.

Their homes are expensive because they pay no tax on gain on their residence.

Fri, 11/13/2009 - 02:38 | 129439 Anonymous
Anonymous's picture

Hang on a sec; in Aust, you pay a one off 'stamp duty' - a state tax - on the purchase of a property and then an ongoing local council charge for services (water, garbage collection etc). For most, these are the only taxes/charges on a property and yes, we do not pay any capital gains taxes on the sale of your place of residence. Investment properties are different. There are other state taxes such as a payroll tax. The Federal government Investment properties are different collects your PAYE (personal) taxes – the 35% you spoke off and the GST. The reason why home are so expensive in Australia has no single reason, there are many and include incompetent state and local government planning restricting land supply, overly generous government housing grants, people willing to over leverage and yes, no capital gains taxes. Australia is doing well considering but there is a high element of smoke and mirrors at play. Mortgage stress is increasing to there highest levels even with low interest rates caused by the shift in full time to part time work. When interest rates went up .25%, to 3.25% the consumer confidence index shat itself. When you consider that this rise was minimal coming of a very low base, hate to see the effect when the cash rates get 5% and banks rates upward of 7-7.5%. It’s going to be interesting.

Thu, 11/12/2009 - 23:14 | 129337 reading
reading's picture

Hey now, 

WE gave our houses away for 0% down to people who couldn't afford them...that has to make it better.

Fri, 11/13/2009 - 04:30 | 129479 blueskyscottsdale
blueskyscottsdale's picture

the next big wave out of China is China tourism. Eventually 1.3billion people are going touristing around the world. Australia will be a major destination for China's tourists. As for the empty mall purportedly in Guangdong, this clip was on Reuters and a person from China commented the mall is 100km from the city. So, no wonder the mall is empty.

Fri, 11/13/2009 - 08:49 | 129545 Green Sharts
Green Sharts's picture

I didn't mean to suggest that Australia is as screwed as the U.S., just that the recent resurgence tied to Chinese demand for raw materials may not be sustainable if China is using the raw materials to build cities, shopping malls, roads and trains well ahead of demand for them.

 

Thu, 11/12/2009 - 18:14 | 129058 darkpool2
darkpool2's picture

Brilliant concept ! Definitely deals with China's other concerns about controlling "social unrest" 

Thu, 11/12/2009 - 18:22 | 129066 Ragnarok
Ragnarok's picture

I was living in Dubai in late 2007  and this very similar to what was happening there.  I remember entire quadrants of the city with multiple sky scapers empty.  We had people come buy our work and try to get us to invest in apartments and villas that no one was living in on pure speculation that if youy build it they will come. We all remember how that worked out.... I believe Abu Dahbi has them by the balls now. 

Thu, 11/12/2009 - 19:51 | 129153 Anonymous
Anonymous's picture

I remember that too -- Dubai Marina, at night, with maybe one or two of the towers occupied and the rest pitch black.
I also remember my friends telling me how easy it was to get credit, the bankers would even show up to your place of business, no need for passports or anything!

Fri, 12/11/2009 - 09:45 | 159966 Anonymous
Anonymous's picture

Only Dubai was debt-fuelled speculation. China on the other hand has more money than it knows what to do with, so some of it is going towards building. No matter how over-inflated the valuations of those assets may be, the eventual correction won't put them underwater since they don't have debt. Big difference.

Thu, 11/12/2009 - 18:25 | 129071 Anonymous
Anonymous's picture

That's the Tax revenue from all our missing jobs. C4C on steroids.
Thank's Clinton, BUSH. WTFU!! Obama!

Thu, 11/12/2009 - 18:27 | 129073 Charley
Charley's picture

WOW!

Hey, we have one of those empty cities right here in the USA - http://www.youtube.com/watch?v=0JbGxIR8JTk&feature=related

 

 

Tue, 08/10/2010 - 02:54 | 512098 Circumspice
Circumspice's picture

Except Detroit grew and was used heavily since the early 1800s. Building Neo-Ordos pulled money away from productive activities to create a city that almost no one uses or has ever used.

Thu, 11/12/2009 - 18:27 | 129074 Anonymous
Anonymous's picture

if you are wealthy in China you cannot spend the money outside of China ?

So what else can you do with all the millions you have made? buy property and hope? buy gold !

Thu, 11/12/2009 - 18:29 | 129077 Racer
Racer's picture

 

Where the elite built difficult to access areas so the peasants were kept at bay

http://en.wikipedia.org/wiki/Chan_Chan

Nothing changes, just the centuries

The book Crowds and Power by Elias Canetti describes it far better that any words I can say

Thu, 11/12/2009 - 18:43 | 129098 Anonymous
Anonymous's picture

Yeah, build more pyramids, that's the ticket, yeah, yeah...

Thu, 11/12/2009 - 18:53 | 129106 Missing_Link
Missing_Link's picture

No, no, you're all missing the point.  They're preparing habitations for the current residents of Indonesia, Papua New Guinea, the Philippines, Australia, and New Zealand, who will need them after the impending supervolcanic eruption of Krakatoa.

Watch this link for the upcoming earthquake swarms in the Sunda Strait region between the islands west of Jakarta.  There were two 5.0+ quakes already this week south of Bengkulu.

http://earthquake.usgs.gov/earthquakes/recenteqsww/Maps/10/105_-5.php

Thu, 11/12/2009 - 20:40 | 129189 bonddude
bonddude's picture

Yes of course. And China's military is seeding the volcanos right now with help from Blowfeld and his pussycat...or is it ...

DR. EVIL ! MUUWWAAAHAHAHAA

Fri, 11/13/2009 - 00:04 | 129365 Missing_Link
Missing_Link's picture

No, that's in Phase III, which won't be implemented until 2027.

Thu, 11/12/2009 - 18:54 | 129107 Anonymous
Anonymous's picture

Reminds me of Dubai, anyone ever move to those ghost cities or are they still just opulent empty address in 130 degree heat to look cool back in London?

http://www.time.com/time/magazine/article/0,9171,1929221,00.html

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