More on Those Chinese Ghost Cities

Doug T.

So when the civil unrest starts, the Chinese govt. declares that they will a) subsidize rent so the masses can move in or b) seize the property from private owners and go into the landlord business, as masses are forced to move to the cities.

Doug T.

Really, it’s Agenda 21, communist style…

http://www.facebook.com/steve.mcnair.5030 Steve Mcnair

This is correctly put forth as a problem created by government since it’s “over there,” in China. Our corporate-imperial state has never admitted guilt when it comes to our own housing disasters. They just blame it on the free-market, which is a shadow of its former self, compared to 100 years ago. The wealth generated was almost beyond comprehension, and it wasn’t completely free then.

http://www.facebook.com/profile.php?id=1457760294 Robert Fellner

I would be very intereted in Peter Schiff’s reaction to this. He is very bullish on China and hasn’t addressed why the apparent massive construction bubble there won’t impact his overall bullish forecast.

Anonymous

Regardless of the source of the distortion, the result is the same.

http://www.facebook.com/profile.php?id=618513534 Matt Helppi

I am also curious about this. It sounds to me like China is about to have a massive collapse, not continued growth.

Anonymous

Great Point!!
Hey, is that YOU Air??

Gregory

Or you could just let prices fall. Maybe someone living on 2 dollars a day wouldn’t mind a nice apartment.

http://www.facebook.com/logan.durand Logan Durand

What is difficult for me is how, on the surface, the whole facade is strikingly beautiful. The cities are well-designed, the buildings are lovely, and the spirit of the workers is inspiring. It’s hard to look at work being done, and accept the conclusion that all of this progress is temporary, and illusory. But it looks like it will all come apart soon.

Anonymous

Maybe they aren’t so stupid after all. The Capitalism we have today, almost requires some segment of the economy to be wasteful, otherwise, it does not function. The Chinese may be building Ghost Cities but when the collapse does come, what collapses is all the paper but the infrastructure will remain. These Ghost Cities will be sold for 10 cents on the dollar, (Yen, or is it Yang…….or Dong, Pong, Song, who cares?) and that is when the masses will be able to utilize these vast cities and they will eventually thrive.
In fact, the ONLY way they can thrive as cities is under the above scenario.

Anonymous

This may be a huge factor as to why China is heavily investing in gold. They know they’ve made a boo-boo and want to bandage it up as quickly as possible with gold reserves.

As for all of those buildings themselves, I wouldn’t trust them. I’ve heard from a couple people who have traveled over there that said the same thing. These buildings were put up too fast by unskilled workers. Problems and catastrophies are bound to happen.

Anonymous

There’s one theory…

http://www.facebook.com/eyecoin Max Myers

I have been to the “New” Zheng Zhou. It is full of people. It is a city that is to connect with another “New” Kai Feng city. There were a few empty shopping malls there, but I have literally been on that curved street featured in the arial image. The city is full. The govt is moving people out of the old down town of those 2 cities into the new area so they can renovate the old downtown. This of course does not justify the govt spending money via central planning, but the story is inaccurate.

Steve on Mare Island

And yet, practically the first words out of the reporter’s mouth were that the Chinese economy has been “ably managed” by the Chinese government.

devo

i have an odd feeling that the new super class, the 1% with their 40% of the wealth, are going to usher in a false boom. i think they might buy up all these problems with their fiat power, then say they own just about everything, making us “slaves” to their corperate will. i actually fear a false boom, where they buy the best minds that would otherwise be doing good things, and force them to work for corperate benefit, seeing as the 1% hold all the power. you think their just going to sit on it?

Jack

I agree that bubbles are wasteful, disagree that it’s capitalism. If they weren’t stupid they’d just go straight to free market and avoid waste of boom and pain of bust (possible catastrophe with lots of corpses in the picture too).

Anonymous

I agree that true Capitalism is not the problem, but TODAYS form of Capitalism is. Todays form of Capitalism is what the world has, not the pre Central Bank era Capitalism we all dream about.

Anonymous

He’s mentioned it before. But he needs to re-visit the issue again.

http://www.facebook.com/stalsbergfam Traci Stalsberg

I’m sure this ties into what was presented in this story…When we were in China I remember being dumbstruck by this huge, beautiful airport we were in that was seemingly empty. It was so large that we needed a shuttle to get to our terminal, but there was no one else there save a few people boarding our connecting flight. During the drive into our destination city, we again were surprised to see well-groomed, modern subdivisions along the highway that had no sign of life whatsoever. They looked completely abandoned! We thought it was very eerie.

I guess this is testimony to the folly of central economic planning…

Political

The government creates a problem and then tries to fix it and makes it even worse. We are better off without government. The property bubble in China is mostly equity based rather than debt based. Equity based bubbles are not as damaging as debt based bubbles. Infrastructure is still better than U.S. treasuries. It is high end property and concentrated in certain parts of the country rather than the entire country.