CBS 60 minutes on Chinese Ghost Cities

I don't know what is scary in Chinese social engineering. The one child family, the flooding of millions of home by dam projects, the cover up of the earthquakes in the 1970's. The latest story about the Chinese Ghost cities and the potential for a massive bust in the real estate bubble is truly frightening.

It makes you severely question capitalism (although there is no pure capitalism, just like there is no pure communism).

So what is a ghost city? A city they planned and built but no one moved to?
Brazila was almost that for quite a while.

Quote: Pacomartin

I don't know what is scary in Chinese social engineering. The one child family, the flooding of millions of home by dam projects, the cover up of the earthquakes in the 1970's. The latest story about the Chinese Ghost cities and the potential for a massive bust in the real estate bubble is truly frightening.

It makes you severely question capitalism (although there is no pure capitalism, just like there is no pure communism).

China is hardly capitalism. I have heard of these ghost cities for a few years now. Make the banks loan the money, keep the workers working, then move to the next. Rumor is also they make little to nothing on all that crap you find at Harbor Freight Tools and other outlets. They just keep selling at cost or below so it all doesn't fall in to itself.

Here in the USA we have seen condo towers with only one occupant and near-empty developments as well. Just not to the same extent.

Quote: Fleastiff

So what is a ghost city? A city they planned and built but no one moved to? Brazila was almost that for quite a while.

To some extent a ghost city appears in many countries. Washington DC took decades to get established, but this was before they had the technology to build thousands of buildings that stand empty. Las Vegas has hundreds of empty condos that there is no demand for.

But the scale of what is happening in China is like nothing I have ever seen. I have read about New South China Mall the 8 year old mall that is the largest in the world and has been 99% unoccupied for it's entire life, but I had no idea the extent of the issue. Nearly every city in China has miles of buildings that are completely empty. The budding middle class has been investing in real estate so that many of them own several empty apartments.

They used to tell us about Brasilia in school, that nobody wanted to leave Rio to live there. But in my mind you must expect a planned city to have a slow start. It sounds like these developments in China may crumble and die without anyone ever living in them, possibly causing global financial havoc in the process.

I think you will find that there is a type of industrial/municipal bond that can be floated to finance a rural technology structure in the USA. Its a program that has constructed or renovated several structures throughout the midwest but that not a single one of them has ever been occupied much less occupied profitably. No local businesses have benefited, the buildings remain empty the bonds unpaid but the wall street bankers still collect their fees for a program that brings "dark fiber" to rural America. Fibre optics cable that will be torn out as obsolete before it ever carries any signal at all. The local governments hear "high tech" and go crazy. No one has ever had a tenant move into the buildings but the program continues.

Perhaps China has the same thing. When capitalism first arrived in China someone did an article on a family that invested in a piano. No one knew how to play it, but it was the only asset the family could pool their funds to buy, so they bought a piano.

Buying an empty condo in an empty city might make sense in China. It would probably allow you to later buy two empty condos in the next empty city they build.
Remember that Chinese Sardine Can court ruling. Perhaps these buildings are unstable and are condos for buying and selling not condos for actual use?

Quote: Fleastiff

I think you will find that there is a type of industrial/municipal bond that can be floated to finance a rural technology structure in the USA. Its a program that has constructed or renovated several structures throughout the midwest but that not a single one of them has ever been occupied much less occupied profitably.

I think in any country you can find massive "inefficiencies" from either capitalist exuberance or government incentives. Capitalism is not really about efficiency. There are 17 million unoccupied housing units in the USA (but not that many are brand new). Only half of hotel rooms are occupied on average, because local governments like to see them built for prestige and to handle peak periods.

But it is the scale in China that gets to you. The 64 million unoccupied housing units in China is compared to about 115 million households in the USA. The USA rarely builds unoccupied shopping malls. Most of the "dead malls" in the USA are old. While there are many unoccupied new buildings in the USA, a victim of the housing bubble, I don't know anyplace where they extend for a mile, let alone hundreds of buildings as conveyed in documentary about China.

Massive relocations of populations, massive detention capability, tardy discovery of construction defects?

Quote: Pacomartin

I don't know what is scary in Chinese social engineering. The one child family, the flooding of millions of home by dam projects, the cover up of the earthquakes in the 1970's. The latest story about the Chinese Ghost cities and the potential for a massive bust in the real estate bubble is truly frightening.

It makes you severely question capitalism (although there is no pure capitalism, just like there is no pure communism).

I watched that. Almost like madness, to keep building syscrapers.

Although the part at the beginning was about Bejeing, the Chinese built the equivelent of Manhattan in 14 years. Gave me visions of millions of ants -- you know they just keep moving dirt, making new tunnels.