Paper Tiger Balm Cannot Soothe Economic Woes

Posted on 17. Jul, 2011 by Theodore Roe in Current Events

As the United States continues to reel from the collapse of the speculation-driven housing bubble, we should count our blessings. Things could have been much, much worse. We could be in the same place as China. Despite the federal government’s massive blunders in propping up the sub-prime mortgage fiasco, the United States’s failure is nothing compared to the titanic boondoggles of the PRC’s dictatorial politburo brain-trust.

The last ten years have seen an unprecedented amount of construction in China. What has been the result of this race to build twenty new cities in twenty years? China is host to a glut of undesirable and overpriced housing.

Recent estimates put the number of vacant apartments in China at almost 65 million. This is happening while maybe urban Chinese are still living in hovels, multiple families sharing one sink and toilet. How is it possible that rampant overcrowding in Chinese slums is still occurring when tens of millions of houses and apartments are sitting empty?

Empty luxury homes line the vacant streets of Kangbashi New Area.

Poor location planning and a massive disparity between income and property value has given birth to the Potemkin villages of the 21st century: Chinese Ghost Cities. Massive, sprawling metropolises like Daya City and Ordos City’s Kangbashi New Area are almost entirely empty. In particular Ordos, known as the Dubai of Northern China for its opulence, has been lambasted for its emptiness by outside media.

Dantu, Erenhot, Bayannao’er, Zhengzhou (New District) are just a few places that remain ghost towns. Some of these towns were built a decade ago, yet boast a tenth of the intended population.

(check out this extensive pictorial done by Business Insider to truly get the scope of this disaster.)

These (soon to be crumbling) Ghost Cities serve as gargantuan monuments to modern China, symbolizing the sheer power of the Chinese government to bend the citizenry to its will and that same government’s total lack of feasible long term planning.

To put it succinctly, these cities illustrate the sheer stupidity of command economies – as if the world needed another lesson in the futility of such enterprises.

These feats of construction are impressive, but they also serve absolutely no useful purpose. In the United States we have seen what improper government encouragement can do to construction. In China the problem is massively amplified. Despite the U.S. federal government’s deepest desire to run everything, it simply is unable to. This is not a problem for Communist China, where political dissention is unlawful.

A crumbling wall in New South China mall.

In a desperate attempt to prove it is an economic powerhouse, the Chinese government has forced everyone to continue building vacant cities and empty commercial districts. The New South China Mall, widely hailed at its opening in 2005 as the largest mall in the world and a certain sign that China was to be the new driving force behind consumerism, is still 99% empty. The mall cannot even afford to keep on an adequate maintenance staff, meaning that the structure is already in serious disrepair. Yunnan University, built for 2.3 million students, has only 11,000 enrolled. How will it be possible to maintain such a sprawling infrastructure where there aren’t even a fraction of the people present necessary to even use it?

So why does the Chinese government refuse to admit that things are seriously out of whack? Well, first off that would mean they need to admit they were wrong, and entities like The Paramount Leader and his committees of Communist toadies are loath to admit such a thing. In any civilized country the people could simply vote the idiots out of office. Sadly, there is only one way to get the Communists out of office, and that is revolution. This is another reason the Chinese government doesn’t want the party to end. Admission of the scope and seriousness of the malfunction of the centralized command economy might lead to political chaos. Unless Hu Jintao can figure out a way to blame the West for China’s economic collapse (keep an eye out for this), such a total failure of the government to protect its citizens might finally lead to the widespread realization that the communist model (spoiler alert!) doesn’t work.

Second, ceasing the endless (and pointless) construction projects would be an undeniable signal that China is no longer growing. This is unacceptable because the whole ethos of the country is currently tied up in the quest to crush the United States and the European Union economically. While it has been apparent to some that the Chinese Tiger has always been a paper shell, I doubt the state-controlled news and heavily censored Internet in China have allowed its own people to know the sheer extent of their country’s own fragility. The Chinese do not realize that their first problem, the de facto totalitarianism of Communism, will forever keep them from reaching the power levels of the West. This blindness, coupled with the crippling collapse of their economy in the years to come, will dash China’s hopes of being a true international power, at least in the near future.

These are the concerns you have when your whole country is built on a mountain of lies and censorship and your economic engine is fueled by slave labor and speculation. Democrats and other Big Government adherents in the United States should stop touting the illusory success of FDR’s works projects, take a gander at China and see the truth. If you think that big central government is the solution to everyone’s problems you should get prepared for useless public works projects and bridges that lead to nowhere (oops!), the same flawed Paper Tiger balm that cannot soothe China’s economic woes.

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Tags: Big Government, china, Chinese government, Daya City, East Asia, New South China Mall, ordos, politics, The Paramount Leader, united states, Zhengzhou