China's Ghost Cities (Mini documentary)

mohib

Senator (1k+ posts)

A couple of months ago, a lot of people were passing around the news about China's plan to create a megacity that would be home to 42 million people, the so-called "Turn the Pearl Delta Into One" idea. The reporting was generally favorable, painting a picture of economic growth and opportunity -- the narrative of a prosperous China, with a growing middle class, that has become commonplace in recent years.

Unfortunately, the view of China's urban planning strategies from the ground is less shiny. A riveting report from Dateline, an Australian TV show, reveals a disturbing pattern of development for development's sake -- the construction of gigantic infrastructure projects with no regard for human needs. (Hat tip to WalkableDFW.)

Take the New South China Mall, in Dongguan. The Dateline crew took a tour of the place, which has been 99 percent vacant since it opened in 2005, and the result is one of the most depressing things I have ever watched. Six years after its creation, what is touted as the largest mall in the world sits almost empty. One of the very few stores that's in business is a toy shop, where the wistful owner spends his days dusting children's bikes that no child will ever ride. He is lucky if he makes one sale a day.

And it's not just that mall that sits empty. So do rows of massive skyscraper apartment buildings and central business districts in new cities around the country. This is at least part of the reality behind the megacities the Chinese are creating. "All the shops in this mall are empty," says reporter Adrian Brown, walking down an immaculate but deserted street in one of the new cities, this one in north-central China. "Not that that worries the government, because they're simply more concerned with maintaining economic growth, and one way of achieving that is building cities like this one."

According to Hong Kong-based real estate analyst Gillem Tulloch, who is interviewed in the piece, the housing units are priced well above what an average Chinese person can afford. The result, he says, is a housing bubble that is terrifying in size, "a property bubble like which I don't think we've ever seen," he says. "It will make the United States pale in comparison. It's said that there's around 64 million empty apartments.... It's essentially the modern equivalent of building pyramids. It doesn't add to the betterment of people's lives, all it does is it promotes GDP."

As the Dateline report points out, there are indeed tens of millions of Chinese people who would like to own their own homes -- but the urban development the government has backed is creating housing stock that is hopelessly out of their reach, even as it destroys old neighborhoods and cities at a feverish pace.

The potential result, as a Chinese sociologist points out, is a growing polarization of Chinese society -- and the potential for civil unrest, as young people are increasingly marginalized and shut out of economic opportunity, and out of any kind of decent daily life, even as the numbers show a booming economy.

Back in 2009, filmmakers Sam Green and Carrie Lozano made a beautiful short film about the New South China Mall called "Utopia: Part 3." It tells the story behind the mall's construction: a local businessman who had gotten fabulously rich in the new Chinese market economy wanted to make his mark in the world by building something fantastic. No matter that the site, which was farmland, had no good access - by road or rail or any other conveyance.

Once the mall got built, it was "too big to fail," and has been propped up by government-backed investors, a chilling example of useless infrastructure and wasted resources.

On the mall's website, almost the only English words are "The New Urbanism City Life." They appear under a stock image of two happy, young, apparently Caucasian people, leaping through the air.

But the mall, and similar planned, built-from-scratch projects, are in fact a grotesque distortion of "city life." It is painfully difficult to imagine how any of them will become a real city, inspiring true love among those who live in it, fostering human connection and spurring innovation.

And yet around the globe, governments and business interests continue to build projects like these (see this report from pre-conflict Libya, for instance). They should look more closely at the Chinese example -- beyond the GDP numbers to the bricks-and-mortar reality. Because when economic growth is pursued for its own sake, without regard to the needs and capabilities of the humans inside that economy, it is only a matter of time before the bubble will burst.

http://www.grist.org/cities/2011-03-31-chinas-ghost-cities-and-the-biggest-property-bubble-of-all
 

Nawazish

Minister (2k+ posts)
Very interesting. I do not know too much about economics.

Can someone please explain, how is this situation better for China?
 

Unicorn

Banned
Very interesting. I do not know too much about economics.

Can someone please explain, how is this situation better for China?

Lets see you bought 100 acres land for 50 Million dollars and you decided to build condominiums and other infrastructure ie roads, mall and parks and no one could afford to buy them you will go bankrupt very soon.

China did same thing on a massive scale. Eventually some one have to pay the piper as the saying goes.

Every country has a Balance Sheet where the Assets must equal to Liability plus Equity. When assets like these properties loose value they become a liability.
 
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smalltimepro

Politcal Worker (100+ posts)
Welcome to capitalism. This is what capitalism brings to the world. Although this is clearly an attempt to highlight housing problems in China, the source is actually rooted in the western economic system. In europe and the US the only way even a well earning man can buy a house is a mortgage. i.e. debted to the banker. This is what is happening in China as well with influx of personal greed and a capitilist economy. The result, accumulation of wealth with few. Hordes of toiling humans.
Here an eye opening statistic. In the US during the last couple of years, while the general population lost 25% of its wealth, the very rich (multi-millionaires) grew in wealth by 23%. All this during an economic downturn. (Source: BBC)
 

Salik

Senator (1k+ posts)
Lets see you bought 100 acres land for 50 Million dollars and you decided to build condominiums and other infrastructure ie roads, mall and parks and no one could afford to buy them you will go bankrupt very soon.

China did same thing on a massive scale. Eventually some one have to pay the piper as the saying goes.

Every country has a Balance Sheet where the Assets must equal to Liability plus Equity. When assets like these properties loose value they become a liability.

Pardon my poor economics knowledge.... Is is something similar to what happened in Dubai??
 

GeoG

Chief Minister (5k+ posts)
Lets see you bought 100 acres land for 50 Million dollars and you decided to build condominiums and other infrastructure ie roads, mall and parks and no one could afford to buy them you will go bankrupt very soon.

China did same thing on a massive scale. Eventually some one have to pay the piper as the saying goes.

Every country has a Balance Sheet where the Assets must equal to Liability plus Equity. When assets like these properties loose value they become a liability.

They have reserves so high that they don't know where to spend without a negative impact on economy.
Easiest and most popular thing is to increase salaries or give bonuses but that will create inflationary pressures in the economy they want to avoid at any cost as this will make uncompetitive in the world.

Simply instead of giving free salaries to people, they are having something made and pay salaries. If an Arab or Indian is head of their state, he will make ten times bigger Taj Mahal or monument of that kind but socialist thinking does not allow them to do any such thing, not a bad IDEA though when objective is keep unemployment at low level.
 

Unicorn

Banned

They have reserves so high that they don't know where to spend without a negative impact on economy.
Easiest and most popular thing is to increase salaries or give bonuses but that will create inflationary pressures in the economy they want to avoid at any cost as this will make uncompetitive in the world.

Simply instead of giving free salaries to people, they are having something made and pay salaries. If an Arab or Indian is head of their state, he will make ten times bigger Taj Mahal or monument of that kind but socialist thinking does not allow them to do any such thing, not a bad IDEA though when objective is keep unemployment at low level.

This is in contrast with conventional thinking there is always the last straw. Only time will tell. India does not engage in building hotels anymore its all for private enterprise.
 

Jack Sparrow

Minister (2k+ posts)
They build all those infrastructure for next 50 years requirement.Point to be noted that biased report is from western media.Which is afraid of emergence of China as a sole superpower.
 

Unicorn

Banned
They build all those infrastructure for next 50 years requirement.Point to be noted that biased report is from western media.Which is afraid of emergence of China as a sole superpower.

Next 50 years??. When millions of Chinese require housing now.

Media is only biased if it does not states facts. Are you suggesting that this report is fabricated and this situation does not exist?
 

Jack Sparrow

Minister (2k+ posts)
Next 50 years??. When millions of Chinese require housing now.

Media is only biased if it does not states facts. Are you suggesting that this report is fabricated and this situation does not exist?

Maha Raj ,This video is fabricated , reporter didn't report the views of officials,whats their plan of building all that infrastructure.May be management plan will be to sale those apartments for overseas Chinese.This is only one of the many possibilities.
 
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karachiwala

Prime Minister (20k+ posts)
Maha Raj ,This video is fabricated , reporter didn't report the views of officials,whats their plan of building all that infrastructure.May be management plan will be to sale those apartments for overseas Chinese.This is only one of the many possibilities.

I agree when the western media is trying to launch a campaign against someone then they have a lot of facts but very little or unidentified or unnamed sources.