Rising Occupancy In China's Fake Manhattan Is "Mostly Government Driven"

Tyler Durden's picture

China's copy of Manhattan is no longer a ghost town, Bloomberg reports. But that doesn't mean it has forever forestalled a "day of reckoning" for its debt-fueled growth.

The northern city of Tianjin drew negative press coverage a few years ago because of a newly built replica of Manhattan complete with a mock Rockefeller Center that was created as part of a massive government infrastructure project but for years was little more than a ghost town.  But the city is now occupants are finally clocking to the city: Bloomberg reports that once empty skyscrapers, vacant office towers and unfinished hotels and apartments are gradually filling up amid the central government’s renewed push to refashion the city into a crucial gateway for a revitalized Northern China.

As Bloomberg reports:

There still may still be a financial reckoning for Tianjin looming in the future, but right now there are green shoots of economic life in the urban districts at the center of the city’s unprecedented construction boom.

But there's a catch, of course: As is true for the broader Chinese economy, the growth in Tianjin "is mostly government driven, though there are signs private industry is coming."

Here's more from Bloomberg:

In the Binhai district, empty offices are filling up with staff from private companies as well as employees of some of the biggest state-owned enterprises, such as China National Chemical Corp., railcar manufacturer CRRC Corp., and China Poly Group Corp., a conglomerate with businesses ranging from explosives manufacturing to real estate." While many local governments across the country are struggling with heavy dependence on debt-fueled growth, Tianjin benefits more than almost any city from its position at the vanguard of two of the country’s biggest national projects.

*  *  *

Bloomberg saves one notable detail for the last paragraph of the story, citing an official who offers some local perspective: The city is supposed to play in important role in China's "one belt, one road" initiave, another massive debt-fueled trade and transport infrastructure project meant to replicate the ancient Silk Road trade routes that connected Europe and Asia. The government-funded expansion aims to join Beijing with the surrounding Hebei Province to create a mega city of 100 million people.

It should come as no surprise that Tianjin has...backing from heavy hitters in the party.

"We want the city to become one of the world’s largest ports like Singapore or Hong Kong," said Xiao Sheng, vice director of the free trade zone in Tianjin. "We want to develop a new business and development model that could be promoted to other regions in China."

But even as China signs up foreign partners for its latest scheme, offering financial inducements like a $50 billion infrastructure investment in Pakistan, a key U.S. ally, some at least are showing unease at the massive debt-fueled spending necessary to bring the project into reality. 

In a diplomatic showcase years in the making, Chinese President Xi Jinping invited leaders from 29 countries to hear his pitch about the "one belt, one road." But what's notable is that India, the worlds fastest growing and second-most populous country, didn't even bother to send a delegation, warning that the "unsustainable debt burden" required to launch the project would be a disaster for the countries involved.

The story notes that though Tianjin's growth rate slipped to 8% last year – down from 9% the year before – it still outpaced 6.8% YoY rate for the broader Chinese economy in 2016. But that's a pretty low bar: China's economy grew in 2016 at its slowest pace in 26 years.

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JLee2027's picture

It's Trump's fault. As a Developer he wanted it built.

NidStyles's picture

Chinaman gonna get Jewed.

Restorative_Ally's picture

At least Chinese can tell Jews apart from Chinese. How many whites think Jews are white too?

When the sky falls, they will know who to send to Madagascar. 

SafelyGraze's picture

OT --

"Today, it’s estimated that less than 0.01% of notes are fake."

http://www.zerohedge.com/news/2017-05-18/31-fascinating-facts-early-history-us-dollar

that is *great* news!!!

hugs,
fiat issuance authority
"it is a Genuine Authentic Certified Accredited Note redeemable for pretty unicorns from dimension 7!"

 

 

winged's picture

"rising occupancy"

At least, they have that. Jews are leaving Israel in droves.

Kissinger: "Israel will not last 10 years."

JLee2027's picture
Try again.

http://www.jewishvirtuallibrary.org/latest-population-statistics-for-israel

On Independence Day 2017 Israel's population stood at a record 8,680,000.  This is a 10-fold increase compared to when Israel was founded in 1948.  
sinbad2's picture

They follow the money, and the flow of US dollars into Israel is massive.

They know the US is cactus and the flow of money will stop, that's why they want Syria, and its untapped oil.

They hope to be able to control global oil supplies by the end of the century.

meta-trader's picture

you can add an extra 1500/USD week after week in your income just working on the internet for a couple of hours each day... check this link... http://bit.ly/2jdTzrM

null's picture

Quite possibly exactly 144,000. Or just one perhaps.

Tallest Skil's picture

Given that the leaders of the Chinese communist government were funded exclusively by jewish bolsheviks, well...

Common_Law's picture

At least they build some stuff with their debt instead of invading other countries.

Offthebeach's picture

Except for Korea, Tibet, Vietnam, ..

Anteater's picture

China's economy grew in 2016 at its slowest pace in 26 years.

Yet still 4x faster than the USA, especially is you ex- Financial and ex-Defense The only 'growth' in USA is in financial derivative CDOs,  and Mil.Gov COLAs.
Soul Glow's picture

"Are you a peasant?  Would you like to live in a high rise apartment and pretend to be a New York socialite?  Then come on down to this city!  The Chinese government will pay you to live here so we can act like debt is prosperity!"

techpriest's picture

I heard the apartments next to the remains of that chemical site are to die for.

https://www.youtube.com/watch?v=stZu1ZRk4q8

Reverend.Pajama.Pants's picture

Actually I think that's kinda the idea. The Chinese are building an urban middle class. That's what matters, building the physical infrastructure that makes possible a certain type of culture.

People get so bent out of shape about the debt on these big projects. But I don't think the CCP cares at all. They have unquestioned political & military control of their country. They issue their own currency and the debt is in their own currency.

CCP has the sovereign luxury of regarding debt for what it really is: an accounting system. Just integers in database tables. Nothing more. We plebs living under totalitarian financialism have to treat debt as something real because we fear the cruel violence of the law. Conversely, the Chinese Communist Party IS the law, so they need not fear the law.

swmnguy's picture

That's exactly what's going on here.  China has had a strong central government for 5000 years by their count; for over 2000 years by anyone's count.  To scoff at this because it's government-driven is irrelevant.  That's how they do everything of consequence.  If the Central Government isn't running it, it isn't legitimate there.

Whereas, as you say, we live under "Totalitarian Financialism" instead, so unless an initiative is sponsored by Finance, it's illegitimate.

So what if this doesn't pay for itself?  It's the government.  It's not supposed to pay for itself.  It's not a for-profit business.  It isn't answerable to for-profit business.

techpriest's picture

"They've had a strong central government for 5,000 years" is a bit of a misunderstanding. While collectivism is certainly very strong in Asian cultures (this also includes the idolatry of high-status degrees and titles), in terms of government, they have had a series of governments that collapse when the government taxes too heavily to pay for people and projects that are too unprofitable.

Ultimately,legitimate profit = the system has more resources than it had before - a positive sum game. If there are too many bad projects, then the result is a negative-sum game where the government is destroying wealth by taking in resources and squandering them. The culture will go on but the state may not.

beemasters's picture

“Let China sleep, for when she wakes, she will shake the world.” - Napoleon

Unlike the US, the Chinese government isn't as controlled by the 1%....yet.

Anteater's picture

'For profit' is the US boils down to either flaying the plebs alive for goods and services 3x more expensive than anywhere else in the world and #25th in outcomes, ... or 'For profit' resolves to some IDIQNB 'scheme' to skim a huge grift slice off publicly-funded or tax-credited PPPs. Nothing Exceptional about it. The Corporate:State Pirate Code is more a set a loose guidelines, and I can tell you right now, we're not gonna make it. The crowds of pensioned retirees are dwindling, the number of second and third homes decreasing, PPI over Median Income inexorably rising, just go anywhere in USA it's being ghettoized by rent-seeking QEn financial leeches. Trump truly reflects the USA in every way: massive fraud and grand larceny. Trump Universe.

Mazzy's picture

Aside from the myriad civil wars and the Mongol and Japanese invasions, not to mention the Jurched and Manchu who assimilated to become "Chinese" just as the Mongols did.  Likely there were many before them earlier in history.

When the central state is strong, the "Chinese" push outward toward their natural geographic barriers: deserts, mountains, dense jungle, an ocean.  When the central state collapses....civilization resets.

Posa's picture

Yes it's brilliant. Really. When debt's too big a problem, just hit the Delete button. And it's gone. It's all about the physical economy. Setting labor and hard capital in motion... hopefully tyo do useful things that enhance productivity and supply the economy with basic commodities (such as housing,clean water, food, electric power) China does all that stuff. private owners will take a haircut if they're too foolish. Just as long as the basic commodities keep flowing like a river. Market fundies can't understand this; and the Predator Class fears this kind of system.

thecondor's picture

"green shoots"  or bamboo shoots

Restorative_Ally's picture

Fake New York, fake Rolex, fake crumbling concrete, fake everything! Even the full feeling I get after eating their food only lasts ten minutes! 

LetThemEatRand's picture

It's not fake, however, that China took the manufacturing base from the US.  I am old enough to remember when China was a non-issue on the international scene.  In the last 25 years China went from a joke to a contender, thanks to the titans of industry in the US and other western nations (and some eastern ones like Japan) looking for cheap labor.   What will the next 25 years bring?  

shovelhead's picture

Flip flop factories in the US.

barysenter's picture

Who cares how old you are? You got played. People Died because You Got Played.
Emotional IQ is your score, non-objectivist. A ! A is your creed. What do Statists do when they get power?
Russia 60+ million
China 120+ million
As the world turns. You Are Next, renta CONquistadore.

LetThemEatRand's picture

What are you doing about it, fuckhole?

barysenter's picture

Walking you to the door, Non-Absolute. You have to do the rest yourself.
There is a positive solution.

LetThemEatRand's picture

Take yourself to the door along with your "there is a positive solution but I'm not going to tell you what it is because I'm full of shit" bullshit.

Lost My Shorts's picture

Cool it Rand.  It sounds like some college student testing his Turing machine blog commenter for a class project.

You heard about AI taking all our jobs.  Pretty soon, AI will be making all the blog comments.  The real stuff will be much harder to spot than that guy.

barysenter's picture

You're an asstroll. You have 5 accounts to post to yourself? You're no Brock. He gets other parasites to do that for him. Get a life.

COSMOS's picture

Agent Smith is now Barysenter.

TheReplacement's picture

As your next President I, TheReplacement, will require that all domestic government spending be to American owned and operated companies that employ Americans.  This is especially true for military spending.  If the system, part, component fails to meet the above criteria then we don't need it.  American troops deserve weapons designed by Americans and made by Americans.  I also want these American troops with their Americans weapons to be protecting America's borders, not any other.

I'm a nationalist.  That means I believe that we as Americans should take care of Americans first, last, and always.  If you think there is something wrong with Americans taking care of other Americans then I say there is something wrong with YOU.

Thank you for your vote.

 

LetThemEatRand's picture

If only we had an America First guy in the last election.

yarpos's picture

Depends,  can the Chinese bring anything on their own ?  or are they just a factory for the world?

They had a big cultural headstart on the western world and blew it before,   we will see.

 

Juggernaut x2's picture

China- The Great Pretender

veritas semper vinces's picture

I think this was claimed long ago by Jewmerica

Posa's picture

China patent filings #3 and exploding fast towrads #1

https://phys.org/news/2017-03-agency-china-explosive-growth-patent.html

In many hi-tech areas they are leaders, eg energy and computers...

are we there yet's picture

From personal experience the US patent system is corrupt in at least 3 patent areas. Pfizer drugs for example has a reputation of lavishly hiring historically friendly patent agency employees.

swmnguy's picture

LTER, I'm not so sure China took the US manufacturing base, so much as US corporations sent the US manufacturing base to China, to cut 80%-90% of their labor costs.

The problem is the way labor is accounted in the US corporate finance capitalist system.  It's a cost.   Costs are to be kept as low as possible and cut whenever possible.  Paying a Chinese factory worker a median salary of maybe $4,000/yr. instead of paying an American factory worker a median salary of about $32,000/yr. vastly outweighs the cost of shipping and energy to get the product to the US.  The product is still sold at the US First World price, of course.

In the end, that $28,000 savings is very costly, because now the US doesn't have a manufacturing base anymore.  But the US corporate interests and the Elites who own them don't care (yet).  They made a killing, and still get fantastic quarterly bonuses for the EPS data, since they can borrow money for less than the rate of inflation to buy back their stock to jimmy those numbers.  That too will have crushing consequences, but they haven't hit yet, so the party is still rockin'!

That's one advantage of Central Planning.  Somebody is minding the national store, so to speak.  In America's corporate finance capitalist system, nobody is looking out for the nation's interests.  There are not "National Interests."  There is no "Public," only individuals whose power is defined by their wealth.

Labor should be considered an asset, not a liability.  Without labor, the owner of a factory can't produce anything.  If Labor were considered an asset in accounting, we'd still have a manufacturing base in the US.  When people objected to sending all our manufacturing to China, they were smeared as Commies for being worried about what would happen to the US.  The standard line was, as long as it profited the Elites, that was as much as the rest of us had any right to hope for.

And now China isn't even cheap enough for them anymore, because the US Elites have already spent the 80%-90% labor discount money, and the destruction of the US middle class that used to have those manufacturing jobs is hitting the corporate bottom line.  So now they want to send the manufacturing jobs to Bangladesh or Vietnam, where median pay is 50% of what it is in China.  They're hitting Zeno's Paradox, though; they'll never get labor cost to 0, because even slavery has costs; but 50% of 20% of the original 100% isn't a whole lot of savings anymore.

Until the US manufacturing worker can live on about $6,000 a year, that manufacturing base isn't coming back.  Or until we change our accounting systems so labor is counted as an asset rather than as a liability.  But that's Commie thinking, or so I'm told. 

Posa's picture

It's a pretty flawed business model if ypu're bankrupting your customers. The only end game is to let the customers die off and live in a New Dark Ages neo-feudalism.

Mazzy's picture

Yeah, it's called rent-serfs.  They'll own all the property and merely let everyone else "lease" a roof over their heads for the night.  Paid ya landlord yet? 

We don't see the plantation because the plantation is geographically scattered across apartment complexes and row homes and single family dwellings with some being big-time players and others being reluctant landlords or elderly who just couldn't sell their previous home. 

We don't see the peasants harvesting crops for their baron/landlord because one peasant might be a plumber, another a mechanic, another might work the cash register at Safeway or stock shelves at Home Depot, etc. etc.  For that matter we don't see the bread/soup lines either because they're scattered to every grocery store and gas station in town via the benefit card system.

 

innertrader's picture

I'M SHOCKED, China didn't take the manufacturing base, Clinton sold it to them!!!!!  Just like BUSH sold us out to Mexico!!!  I still remember the day that BUSH stated loud and clear how NAFTA had been a victory for the NWO, with his fist in the air and filled with emotion!!!  Interesting I never saw it again!  The NWO press shut that one down!  AMERICA was given away and is being destroyed by the NWO Group!  WAKE UP!

TRUMP is NOT ONE OF THEM and that is why he is their enemy and they are pulling out the stops to destroy him... AND THE USA!!!

 

TRIUMPH with TRUMP!!!

Anteater's picture

25 years? How about just 5 years?

The collapse of India society and massive influx to USA of their India IT caste, doing to High Tech (and Education) what China did to manufacturing: completely gutting USA, and leaving a plantation economy based on agriculture and resource extraction by tax-dodging international corporations. Nobody anywhere wants to hire you, it's not just here in the US. No dinero, adios, gringo. So you'll hunker down, then you'll bunker up, then become a walking joke, like the old cigar store Chief-in-a-blanket, or the Black bathroom attendants and shoe-shine boys of my youth. Outcasts. Untouchables. 275,000,000 poor White trash.

You watch. Trump 2020 - Return of the Pharoahs

NurseRatched's picture

We should send China a REAL Mayor de Blasio - he will be right at home.