Tuesday, Nov 24, 2009

The Kafka economy

Credit Writedowns: China's empty city

China's officials have been told to achieve 8% GDP growth, so they're throwing up buildings, and even cities, in order to hit that target. This video shows the new city of Ordos, in Inner Mongolia, built over the past 5 years. It's completely empty, apart from one traffic cop directing five cars a day. It's claimed that many of the houses have been sold but any purchases so far have been for investment only - nobody is actually living there (why would they? - there's no economy). But the city is said to have the second highest per capita income in China after Shanghai. Funny, that. (On the same theme, see Hugh Hendry: 'The emperor has no clothes' a clickable video on the same page.)

Posted by icarus @ 06:35 PM (1561 views)
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1. tenyearstogetmymoneyback said...

I saw a program a couple of years ago where they visited an almost empty
Chinese housing estate. The people thay did find there explained that the
chinese regard houses in exactly the same way as we do cars so a
"second hand" looses money in exactly the same way as a car does here
when the purchaser starts driving it.

Tuesday, November 24, 2009 06:59PM Report Comment

2. mken said...

From a Chinese perspective, having funded the debt fuelled boom in the west and now looking on as the dollar collapses and western "asset backed" securities crystallise to worthlessness, this kind of project seems eminently sensible.

Tuesday, November 24, 2009 09:02PM Report Comment

3. peter_2008 said...

So the second Great Leap Forward? The first in 1950s' set impossible growth targets by communists. People had to melt their tools to meet steel production target and fill up warehouse with foods (while starving to death), so food surplus target could be met.

Well, in the not so far future communism UK, newly elected growth obsessed Gordon Brown will make it constitutional to grow 5% YoY. The impossible would be achieved by making government deceit increase by 2 folds YoY. And that is a mandatory target.

Tuesday, November 24, 2009 09:12PM Report Comment

4. charlie brooker said...

When officials were asked why they built an empty city they replied "Vee vere only obeyed Ordos"

(In a Chinese accent obviously)

Tuesday, November 24, 2009 09:38PM Report Comment

5. icarus said...

The disconnect between house prices and local incomes taken to the extreme.

Tuesday, November 24, 2009 09:40PM Report Comment

6. rumble said...

Not to be outdone by Dubai throwing up towers everywhere, China starts throwing up cities. Surely there are better alternatives. Empty cities, cars running on air - the poker economy.

Tuesday, November 24, 2009 10:57PM Report Comment

7. Earthstick said...

As I understand, the city of Cambridge developed because centuries ago it was the only part of the land that was solid enough for people to cross from the south east to the midlands. Around it was of course the fens. March land.

The city grew for natural reasons.

This city is the embodiment of communism. Government planning rather than organic development.

Tuesday, November 24, 2009 11:50PM Report Comment

8. mountain goat said...

Since we have a housing shortage maybe we could all go live there and the Chinese workers come here to build Gordon Brown's Chinese factories.

Wednesday, November 25, 2009 12:19PM Report Comment

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