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China's Replica Of Manhattan Results In Yet Another Ghost City
While the growth of China's ghost cities of entirely derelict and unlived-in residential real estate have become anathema; the story of the nation's 'if we build it they will come' commercial real estate bubble has been less exposed but is no less incredible. As Bloomberg reports, China’s project to build a replica Manhattan is taking shape against a backdrop of vacant office towers and unfinished hotels, underscoring the risks to a slowing economy from the nation’s unprecedented investment boom. Stunningly, the development has failed to attract tenants since the first building was finished in 2010 leaving one commercial real estate investor to proclaim, "Investing here won’t be better than throwing money into the water... There will be no way out - it will be very difficult to find the next buyer."
China's own Big Apple may be rotting from the core. A new central business district modeled after New York City is going up in Tianjin...but the nation's slowing economy is exacerbating the risks from its unprecedented credit binge...and that's putting China's Manhattan project in jeopardy. Bloomberg TV's China Correspondent Stephen Engle reports.
As Bloomberg explains,
The skyscraper-filled skyline of the Conch Bay district in the northern port city of Tianjin has none of a metropolis’s bustle up close, with dirt-covered glass doors and construction on some edifices halted. The area’s failure to attract tenants since the first building was finished in 2010 bodes ill across the Hai River for the separate Yujiapu development, which is modeled on New York’s Manhattan and remains in progress.
“Investing here won’t be better than throwing money into the water,” Zhang Zhihe, 60, said during a visit to the area last week from neighboring Hebei province to look at potential commercial-property investments. “There will be no way out -- it will be very difficult to find the next buyer.”
This is slowing growth dramatically as the realisation of building stuff that no one wants is not sustainable...
Tianjin, a city of 14.7 million people whose center is about 125 kilometers (78 miles) southeast of Beijing’s, saw its economic growth cool to 10.6 percent in the first quarter of 2014 from a year earlier, from 17.4 percent in full-year 2010, compared with a moderation in national expansion over the same period to 7.4 percent from 10.4 percent. An annual pace of 10.6 percent would be the weakest for Tianjin since 1999.
CHART
And Default risk is mounting...
“Both the central and local governments clearly know that a big slump in the property market will significantly magnify financial system risks, and they know it’s a delicate balance,” said Liu Li-Gang, chief Greater China economist at Australia & New Zealand Banking Group Ltd. in Hong Kong. The government will try to do everything to ensure an “orderly de-leveraging,” Liu said.
As the streets remain deserted... Ghost offices...
Rather ominously Stephen Green, head of Greater China research at Standard Chartered Plc in Hong Kong concludes,
“There will have to be a reckoning,” as sales of bonds by local-government vehicles to repay bank loans are just “buying time,” he said. “The people will pay” for it through bank bailouts, recapitalization with public money or inflation.
But apart from that... and the residential real estate bubble.. and the commodsity financing ponzi scheme... and the promise of no major stimulus... we are sure China wil have a soft landing.
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Ahh yes. Ghost cities like this:
http://www.newgeography.com/content/002159-zhengzhou-ghost-city-alive
Who wants to replicate that SHIT STAIN of a municipality know as Manhattan.
I love NYC. Right where it is.
That's a bit oxymoronic? Bikers and Chicks in Manhatten?
RE prices [like everything else] moves in cycles. We have not seen a real, unmanipulated cycle for a long time. The next Bust will be Epic.
Epic, no bust...just advert these on Mar's moon.
Ai bai fulam yu, hubai fulam mi...?
But when supply goes up, prices come down until everyone who wants one can afford one and everyone is happy and lives happily ever after in their own little house that they could afford to buy due to the oversupply and ... oh, wait! Maybe Chinese workers have to get paid less so those buildings will be cheaper and then they can afford to buy an apartment all for themse - , ummm, no that's not it. Hang on, I've got an economics textbook here somewhere, it is going to explain it all to me, I promise, I just gotta keep reading these economics books until I know exactly what is going on ...
Now all the Chinese 'security' services need to do, is get a few Uyghur terrorists to hijack a couple of fully-laden Cessnas...
They look ready for the time when US collapses.
PT - I was thinking along your lines as I read this article. At least China is producing something hard, concrete, and real with their human and financial capital. Compare that with US Capitalism and its emphasis on speculation, wild credit excesses and debt levels that produce nothing. What's being built here? How's are infrastructure? How many college grads are we producing with engineering, mathematical, etc. degree's? - China paints a picture to me of late 1800's industrial America, and in that same period, could sit the US, with respect to the British Empire.
Hi,
I will not get into anything specific, or go into any details whatsoever, and I'm not trying to be mysterious, obtuse, or anything like that. I live in china. I have a serious question, but it's much too massive for me to get my head around. It's this:
If at some point in the next few years, china implodes with civil strife, warring factions, etc., kinda like the period before the japs came in, what affect will this have outside china? Any silver linings anywhere?
I'm not joking, so please anyone who could lay out some realistic scenarios, I'd be very grateful.
Thanks.
Chinese based manufacturing would move local (USA) again, or to Vietnam, or some other place Dick Cheney owns.
Such a monumental event would surely have much greater reverberations abroad I'd think.
A couple of miles down the road people work their guts out to struggle to buy houses while these ones are empty. Eventually they deteriorate and are demolished ... and our learned ones insist:
"there is no better way!"
"Oh!, we can't just give them away!"
Textbook capitalism asserts empty houses will be sold to the highest bidder.
Textbook communism asserts that the empty houses will be given to whoever needs them.
Meanwhile in the real world, both in China and US (and elsewhere), rich people make money out of keeping buildings empty while others are homeless. And don't forget to re-use cloth bags because paper and plastic ones are bad for the environment.
This article paints a solid ground standing of the 'americanism' blobbing up in China phenomenum. Bigtime.
What a cans kicking it is. How long could it remain credible?
HERE IS ALL THE EVIDENCE YOU NEED!!!
"Build it and they will come!"
"Housing - led recovery!"
Bwah ha ha ha !!!
I wish the US version of Manhattan would be more like the Chinese version, especially WS.
Then if you started having WS Banksters commit suicide for honor, well that would just be icing on the cake.
How long until those buildings fall from lack of maintenance not to mention being hastily built to begin with
I tell you who wants to do that -- brain dead Chinese government officials whith no self respect and who give birth to themselves by having sex with their mothers.
At least they have something other than trillions of dollars of war debts.
Chinese Ripoff 9/11 for Chinese Ripoff Manhattan.
Now that would be something.
The United State_ has the billion-FeRN embassy in Oilraq...or are the rebels enjoying it yet?
what's chinese for "potemkin village"
Good question. Have they worked out that no-one will ever live in them yet? You know, to the point where they don't bother to make the buildings structurally sound any more because they know that no-one will live in them anyway ("Well, not in my life time") and they need to cut costs ...
Manhattan Project.
US Manufacturer
Central planning strikes again.
In US, empty houses strewn across the whole country. In China, empty houses stacked up neatly into empty cities.
Hey! I saw Dr Zhivago. If their communism was working as advertised then those buildings would NOT be empty.
Depending, of course, on how close those buildings are to food and water. But as long as you got water upstairs, who's gonna stop you from putting a garden on the roof? Errr, might need to make sure those lifts keep working.
huh, maybe chinese not so dumb...
I feel bad for the Chinese workers that are making the nice pillow cases that these fuckers are using to populate their ghost cities.
Remember, they're better off than they were before, just like the English peasants were better off working in the Dark Satanic Mills after the factory owner's benevolent Enclosure Acts. Rand, Hayek, and Rothbard told me so.
Why do people like you insist on attacking the people with ideas instead of the ideas themselves?
Thinking (and thus producing ideas!) is hard work.
It's just what cocksuckers do.
Remember, they're better off than they were before, just like the English peasants were better off working in the Dark Satanic Mills after the factory owner's benevolent Enclosure Acts. Rand, Hayek, and Rothbard told me so.
I hate to say this but the Chinese ARE a lot better off than they were before. You have a burgeoning middle class in China... and they're not starving in their tens of millions anymore.
And where did Rand, Rothbard, and Hayek - all very different people, by the way - describe the Enclosure Acts as 'benevolent'? Links please, troll.
Sadly, the voting suggests yet another irony miss.
his 1 week tenure on ZH has brought out the best he/she has, which is exactly that, 1 week
tenure is a scam. How long you been here means nothing.
No shit. Particularly for Prains...the Arctic Fucking Warrior.
Send the Other Than Mexicans there.
Iron builds strong bones and muscles. (plywood/bamboo scaffolding) An Anonymous says so...
On sale! Buy now Round Eye. CHEAP, CHEAP, CHEAP. Great movie
set for End of World movies. No traffic.
is there even 1 billion people in China?
The soviets use to fix and exagerate the amount of fish they where catching to give a false mirage of prosperity in their communist ideaology. Are the Chinese using populis, yes populis, and their population like a nuclear deterent?
P.s. Zero headge come into the 2010's and get grammer corections on this site.
"P.s. Zero headge come into the 2010's and get grammer corections on this site.
" corrections"?
That was unkind, Yen.
He's probably the smartest guy in the trailer-park.
Unkind? Like the Fed, plunge<>fucking your Mother's pension?
is there even 1 billion people in China?
The soviets use to fix and exagerate the amount of fish they where catching to give a false mirage of prosperity in their communist ideaology. Are the Chinese using populis, yes populis, and their population like a nuclear deterent?
P.s. Zero headge come into the 2010's and get grammer corections on this site.
Errors this numerous have to be deliberate, surely? Are posters using errors, yes errors, like a nuclear deterrent?
But +1 for questioning the official number of Chinese. I suspect there are only a few thousand of them... I mean, when have you seen more than that in a single photo? They just move them around a lot.
Ideaology and headge are the Greek (or maybe Olde English) spellings, populis is vox populi plural, deterent is an actual typo, should be detergent [nuclear detergent], gramer corectios I don't have no clue.
where you gonna buy a flat ? IN A GOSTCITY !!!!! YEAAAAAAA
Too bad there was only one out of two billion people who did see it coming. Give that guy a medal. Oh well, maybe next time things will be different, for the better.
Can you say "Cargo Cult"???
I know what you mean, but who knows, maybe the development is more solid than we think.
Hey, my painted-rock radio can leave a sizeable dent in yer head (solid indeed!)
Well, the "iRadio" device that you listen to was indeed made in China. The only rock in this conversation is the one in yer head.
Keeps the game going until 'the rug gets pulled out', nothing more is necesssary at this point... just keep the herd contained and ready for 'market'.
Sweet!!!!
Time to package all the toxic shit into securities and dump them on granny investors.
Australia can provide the fudge packaging and the cocky sucker victims. Quick, list it all on the ASX.
Australian granny investors are spread wide open for "business".
Why, just the other day, the telescreen was telling me that 3% compulsory super, I mean 5%, I mean 7%, err, I mean 9%, no that's not it, I mean 12 % super might not be enough!!!!!! What are they talking about now? Did I hear them say 20%?
Don't worry rest-of-the-world! Us Aussies will save ya! With our 76948 kajillion percent compulsory superannuation we can buy up the rest of the world and we might just have enough money to retire on, but I'm not too sure about that. We may have to increase our contributions.
And for those mathematicians who think we can't contribute more than 100% of our salary towards super, that's not how they calculate it. Total money out of employer's pocket = wage + x% of wage as super.
Maybe they were going to make another Omega Man movie.
I don't subscribe to global warming theory, but if it happened, I'd be quite giddy to see that under water in a few years.
Hollywood should open a division there. Great city for filming. They won't have to worry about pesky permits, traffic and tourists.
in Thailand where I live we have a huge bubble
if you run past the clip of the boat on the river and you look closely, you can see floating pigs with bath caps on doing the backstroke
it's a helluva surreal job they've done here
the good news is that exposed structural metal weakens over time, especially when it's encased in concrete - so the nice unfinished building shouldn't take long to fall over
China needs to learn how real wealth is generated...WAR
They shoulda burried Jimmy Hoffa in one of the foundations.
They should'a burried the "Constitution" about yesterday! What are you going to do about it?
I don't know. Maybe I'll consult a fortune cookie.
China could fill up a new ghost city project with millions of tourists attracted to a GHOST CITIES OF AMERICA THEME PARK, featuring DEETROIT, STOCKTON, VALLEJO, COMPTON, CAMDEN, NEWARK, CHICAGO and others, cheek-to-jowl NYNY Las Vegas style.
They will need to import city and civilization killers for that. Maybe Jesse Jackson or Al Sharpton can send some over along with our new 'Dreamers'.
Send Kwame Kilpatrick over there to get them back on the road to "prosperity"...
Contrarian investing says, buy up big now.
Build it and they will .. Oh crap
China's 1 child policy has left a HUGE gap in labor force. Just in time for the Americans! "Let's twade praces"
make me ho ho ho!
Now every 'citizen' can also be an 'american' in China's peopleism of central 'party'
nink: ... and "housing - led - recovery" !
oh man,
p
...
http://jessescrossroadscafe.blogspot.com/2014/06/have-pleasant-weekend.html
27 June 2014
Have a Pleasant Weekend
.
Where Do The Children Play - Cat Stevens (Lyrics)
http://www.youtube.com/watch?v=7a4DCxAi020
"China-bashing American propaganda! China is the country of the future! Everything China builds is state-of-the-art!"
Blah, blah, blah...
Just more evidence of a misguided state with massive overcapacity, huge imbalances, and epic bubbles. The end of these things will be fun!
Here's 2 cents from a friend -- Fire
http://www.taipeitimes.com/News/editorials/archives/2014/05/18/2003590608
Thanks for the link. well written!
Fires burning so many countries, I can't keep up...
I don't know whether I should find this funny or scary...
Scary. Definitely.
Almost as if the Chinese know that the east coast and New York is doomed and they want to build and model on the old empire, like Constantinople was basically Rome in the Near Asia. Once the Dollar Empire falls then the Yuan empire has already been built and ready to move it to. Notice the street signs were in English as well as Chinese.
Almost as if the Chinese know that the east coast and New York is doomed and they want to build and model on the old empire, like Constantinople was basically Rome in the Near Asia. Once the Dollar Empire falls then the Yuan empire has already been built and ready to move it to. Notice the street signs were in English as well as Chinese.
Anyway the model looked good.
Only way to solve this is...WAR
This is an unnatural act.....
Fast growth tends to mask flaws and weakness within a system, and China has been growing like a weed for years. To make things worse many of the investment decisions were driven by politics and often influenced by corruption. This has created massive overcapacity. Money has been poorly allocated and often shoveled into deep holes like ghost cities and bridges to nowhere.
Currently a 6.6 trillion dollar spending spree used as stimulus to combat global economic slowdown is coming back to haunt China. This has greatly expanded credit and created huge overcapacity during the past five years. A massive debt crisis now looms in the offing. At stake are trillions of yuan in bank loans that companies producing everything from ships to steel to solar power are struggling to repay as the world’s second-largest economy in in the mist of a major slowdown and the weakest annual growth since 1999. More in the article below.
http://brucewilds.blogspot.com/2013/11/china-land-of-overcapacity-and-de...
Did China build a new U.N. building yet?
where is the scores!
China is the ultimate Example of totally failed Central planned (pseudo) Economy and society.
China banks are leveraged 1200:1 ... yes it is not a typo: a thousand and two hundred to one Leverage ... think 20 to 1 (EU) or 40:1 (USA) is to much leverage for the banking sector? You are absolutelly right, now Imagine 1200:1 ...
a) these people are nuts & spending like drunken sailors
b) these people are smarter than a fox & think those dumping the West in its failure will want to go some place familiar to do business as they always did