

New China Cities: Shoddy Homes, Broken Hope - danso
http://www.nytimes.com/2013/11/10/world/asia/new-china-cities-shoddy-homes-broken-hope.html?hp&_r=0&pagewanted=all

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tokenadult
The carefully reported article here reports a number of start facts, among
them how the new town profiled here began: "The local government used intense
pressure to force farmers out of their villages. It tore up roads and cut
electricity and water. Even so, thousands stayed on. As a final measure, the
schoolhouses — one in each village — were demolished. With no utilities and no
way to educate their children, most farmers capitulated and moved to town."

These housing developments promoted by corrupt local government officials are
the leading indicator of a coming collapse of the real-estate market in
China.[1][2]

As the article kindly submitted here points out, most of the "investment" in
new housing in China is destructive malinvestment that reduces wealth. "Some
residents wonder why they went through these travails when so little
development is visible. Outside the town, most of the former township lies
empty. Some hotels and office blocks have been built next to the airport
logistics center. But mostly, one is confronted by mile after mile of empty
lots — once farmland, now lying fallow, sometimes blocked from view by endless
sheet-metal fences painted with propaganda about prosperity and development."

Yes, China has an increasing population, just as the United States had before
its housing market bubble burst, but just like the case of the United States a
few years ago, the current residential housing market in China is based mostly
on speculation. The speculation occurs because middle-class investors cannot
find a better investment vehicle, and because they are making unrealistic
assumptions about future demand. What's unrealistic about the demand is that
migrant workers moving legally to Chinese cities (as they already move
illegally) will not possibly be able to afford current market prices for new
housing units in China. Many tens of thousands of newly built apartment flats
in China will not be occupied by paying renters or owners before they crumble
because of their poor construction. The unknown is whether or not the current
political system in China will crumble with them.

[1] [http://finance.yahoo.com/news/uncomfortable-truth-chinas-
pro...](http://finance.yahoo.com/news/uncomfortable-truth-chinas-property-
market-084546007.html)

[2] [http://www.forbes.com/sites/realspin/2013/10/28/in-china-
the...](http://www.forbes.com/sites/realspin/2013/10/28/in-china-theres-not-
one-city-sans-terrifying-stretches-of-empty-houses/)

~~~
danso
While the OP is another article in the long line of articles themed: "Big
government planning has unintended consequences"...what stuck out to me in the
OP was that the _intent_ of this plan was actually quite good and sensible, in
terms of forward thinking as China grows:

> _The idea was to consolidate the villages into one new town called Huaming
> that would take up less than one square mile, versus the three square miles
> that the dozen villages had occupied. A portion of the remaining 59 square
> miles could be sold to developers to pay for construction costs, meaning the
> new buildings would cost farmers and the government nothing._

* The rest of the land would stay agricultural, but worked by a few remaining farmers using modern methods. This would achieve another aim: not reducing the amount of arable land — a crucial goal for a country with a huge population and historic worries about being able to feed itself.*

Consolidate the population into a city -- with lots of green space and modern
apartments -- so that the land could be more efficiently farmed? Sounds like a
great intention...but it's not the intention that's bad, it's the [insert your
favorite reference to government bureaucracy/tendency for institutions to harm
the individual].

What makes this article more depressing than most is its reaffirmation that
more technology/modernization almost never benefits the people closest to it.
For a very long time, farming has been unquestionably improved by technology
and planning...but has that resulted in farmers living decent human lives as
machines take over their work? Not always. So I think it's quite optimistic to
think that as other classes of citizens find their work automated and
modernized, they too will not reap the promised benefits, even if society, in
the long run, benefits.

