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China's phony construction boom
China's phony construction boom
With the massive amount of financial resources China has gained, the central goverment has financed various housing projects throughout the country (housing being a big issue in China). Yet a lack of understanding for urban development and the free market has lead to a number of rather big failures of investment all throughout the country. Espacialy in housing various ghost cities have been built throughout the country. The central goverment also invested in various project building malls and "tourist attractions" all throughout the country in the belief that it can guide urbanisation and the Chinese market towards making those projects profitable.

This is an Australian documentary on the subject:

RE: China's phony construction boom
I saw a news report about this some time ago. There's a movie over here which has the tag line "if you build it, he will come."

Apparently that does not apply in China.
RE: China's phony construction boom
There is nothing phony about the Chinese construction boom. Phony construction boom would be a spree of building fake houses.

Everything built in china is real. The main thing is they are built on highly speculative financial forecasts. The Nature of construction boom changes on a sliding scale as a function of ease of obtaining credit. When credit is difficult to get, then only the most reliably profitable projects will past muster. When credit is cheap, all sorts of speculation runs rampant, because the speculator stands to profit from event the slimiest chances of success, while secure in the knowledge he could pass the risk to the creditor.

What china is seeing now, and attempting to control, Is quite a real construction boom, but one that is based largely on speculation.

On the flip side, the west does tend to indulge in premature Schardenfreude where chinese development is concerned, perhaps partly out of the fear that appearent opportunity for glee must be indulged in promptly and to the hilt lest the opportunities proves false with passage of time. With this in mind one must admit China indeed had a substantial history of making massive investments that appear speculative to western eyes, but which later prove remarkably well thought out and prescient. One example is the country's half trillion dollar high speed rail network, which was launched amidst howls of glee, but which now runs at full capacity and is considered a cornerstone of the country's 50% gain in blue collar productivity since 2007. Another is the recent dire forecast of utter and unavoidable credit catastropy, which had been shrill as recently as july, but which seem to have vanished as completely as the voices of the doom Sayers.
RE: China's phony construction boom
As soon as Starbucks finds out there's no Starbucks in those Chinese cities, they'll be building one on every other block.
Christian apologetics is the art of rolling a dog turd in sugar and selling it as a donut.
RE: China's phony construction boom
(October 1, 2013 at 10:33 am)Doubting Thomas Wrote: As soon as Starbucks finds out there's no Starbucks in those Chinese cities, they'll be building one on every other block.

I've not yet found a Chinese city that didn't have a Starbucks. There is even a Starbucks in the Forbidden City - the former imperial palace - in Beijing.
RE: China's phony construction boom
I'll never forget how disgusted I was to see a McDonalds near the Baths of Caracalla in Rome. Now that was a fucking sacrilege.

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