Paper Tiger Balm Cannot Soothe Economic Woes

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.