Ordos Two Years Later

In late 2009, a number of western media outlets ran reports on the "ghost town" that is Ordos, Inner Mongolia. I put up a blog post about the city at that time. Ordos, a city flush with natural resources and wealth, is a fascinating case study of China's method of development.

Melissa K. Chan from Al Jazeera just visited Ordos this week and has a short video clip on what it's like there now, two years later:



I've written a lot about this sort of growth in the past. Building cities with the hope that one day residents will move is, undoubtedly, a risky move.

When I was in Xi'an this summer, I saw row after row after row of apartment blocks that were finished with only a couple lights on in the entire building at night. While Ordos is the poster child for ghost cities, it's not the only place in China where this is going on.

At this point, I still can't venture a guess as to whether this is all going to work out. My gut tells me that development like what's going on in Ordos is ludicrous. But China has proven me wrong many times before and I wouldn't be shocked, in five years, to see this experiment working out.

Traffic

Xi'an's traffic is much worse now than it was when I left China in 2009. And it's multiple factors more intense than when I arrived in China in 2006.

Qian learned how to drive in the US last year. She hadn't been back to China since getting behind the wheel for the first time. Traffic was the first thing she commented on upon returning to her home. Switching lanes without looking or using a signal, stopping and reversing on the shoulder of a highway, those turning left going before those going straight at an intersection, etc. - she couldn't believe the audacity Chinese drivers possess given the tight spaces in which they have to operate.

Chinese cities, so dense when compared to western metropoli, are already so crowded. The addition of scores of personal automobiles to Chinese cities is causing serious gridlock. Unfortunately, there's really no solution to the problem of China's increasingly cramped traffic lanes.

China already has plenty of public transportation options - buses that constantly run, trains, subways, and a rapidly developing high-speed train network - and the masses use them. Several Chinese people I know who own cars often ride buses or trains. But there are just too many people who are beginning to accumulate wealth who want to own a car for the increasing traffic problems to go away.

In many respects, I think it's great that so many Chinese are getting to achieve their dreams of car ownership (the red blood flowing through my American veins just perked up as I typed this sentence on the morning of July 4th). Overall, though, I find China to be far less charming of a place to live the more congested its streets become.

Random Observations from Xi'an

The following are some random observations I wrote down while in Xi'an:

- I could see nine construction cranes from the bedroom we stayed in at Qian's parents. NINE! Every morning at dawn, the sounds of hammers started echoing throughout the apartment blocks. Construction continues at an amazing clip in the Middle Kingdom.

- Related to the new construction, scores of old 城中村 (city villages or "primitive" neighborhoods) are being torn down at an amazing clip. Although there haven't been western journalists writing about the destruction of neighborhoods in Xi'an (like there have been on Beijing and Kashgar), Xi'an's old-time, low-income neighborhoods are disappearing quickly. New apartment blocks and luxury shopping centers are rising up from their rubble.

- Xi'an (and China in general) has gone nuts promoting the 2011 International Horticulture Expo that is in Xi'an this summer. I got annoyed with the hype of this event and I was only there for three weeks.

Qian and I went to the expo with her family. It was lame. Three hour waits to get into a greenhouse or climb a pagoda. We ended up just walking around the giant park that had minimal items of interest. There are free parks in Xi'an more interesting than this 100 to 150 RMB per ticket event. All of Qian's family agreed with this sentiment.

The greatest irony is that this green expo is in one of China's most polluted cities. The day we went to the expo, the pollution and smog in Xi'an were at an unfathomable scale.

- After mocking Xi'an and the expo, I do have to say that the pollution in Xi'an is getting better. It's still horrific and surely unhealthy, but it's light-years better than when I arrived in China the first time in 2006.

- Like Americans, the Chinese are drinking lots of vitamin water. "VC," or vitamin C, is something the Chinese have gotten into.

- Groceries are damn expensive. We've all heard about inflation in China. I can confirm from the ground that it is bad. Qian and I calculated that for many items, including a lot of varieties of fruit, that things are cheaper in the US (after translated into US dollars).

- Chinese people are incredibly scared of eating hot pot at restaurants these days. I had to beg Qian and her family to eat a proper Sichuan-style hot pot meal at a restaurant. I'd missed the news from the US, but beginning last year, there have been a score of reports on the unsanitary conditions at hot pot restaurants. The one accusation I kept hearing from people is that the restaurants re-use oil from one table's pot and then give it to the next people who come in. Don't get me wrong, that's absolutely disgusting. I find it hard to believe that it's impossible to find a clean hotpot restaurant, especially given the scrutiny the restaurants are under these days, though.

The Ultimate White Elephant?

I was taken aback by a headline I saw a couple days ago.

From China's The People's Daily:

Kunming-Singapore High-Speed Railway begins construction

The Kunming-Singapore High-Speed Railway began construction on April 25. The railway will shorten the travel time between Kunming and Singapore to only a little more than 10 hours in the future.

The Chinese government expects the railway to be put into operation by 2020. The line, starting from Kunming, capital of Yunnan Province; passes Mohan, a border town with Laos; and Wangrong, a popular Chinese tourist city; and ends in Vientiane, capital of Laos. Construction of the Mohan Railway Logistics Center has already started.

According to the Intergovernmental Agreement on the Trans-Asian Railway Network, the Kunming-Singapore High-Speed Railway, which is in fact the central line of the southeast part of the Trans-Asian Railway Network, will also pass Bangkok and Kuala Lumpur, and end in Singapore, with a total distance of 3,900 kilometers. Once completed, it will take passengers a little more than 10 hours to travel between Kunming and Singapore by train.

Read On

This is such an audacious plan. The red-blooded American can-do spirit pumping through my veins admires the 人定胜天 attitude that lies beneath such grandiose aspirations. I have a soft spot in my heart for this sort of stuff. China is grabbing the present by the horns and is going all out.



There is going to be plenty of skepticism of this sort of stuff from western pundits. The logistics of a plan this big can certainly be questioned. But the constant questioning of China's infrastructure by some seems misguided to me.

The loudest critic of these sorts of projects (and proponent of 杞人忧天) across the globe is "Dr. Doom" - NYU professor Nouriel Roubini. Roubini wrote an opinion piece a couple weeks ago that China is going to falter after 2013 after a recent visit to the country.

From Slate.com:

I recently took two trips to China just as the government launched its 12th Five-Year Plan to rebalance the country's long-term growth model. My visits deepened my view that there is a potentially destabilizing contradiction between China's short- and medium-term economic performance.

China's economy is overheating now, but, over time, its current overinvestment will prove deflationary both domestically and globally. Once increasing fixed investment becomes impossible—most likely after 2013—China is poised for a sharp slowdown. Instead of focusing on securing a soft landing today, Chinese policymakers should be worrying about the brick wall that economic growth may hit in the second half of the quinquennium.

Despite the rhetoric of the new Five-Year Plan—which, like the previous one, aims to increase the share of consumption in GDP—the path of least resistance is the status quo. The new plan's details reveal continued reliance on investment, including public housing, to support growth, rather than faster currency appreciation, substantial fiscal transfers to households, taxation and/or privatization of state-owned enterprises (SOEs), liberalization of the household registration (hukou) system, or an easing of financial repression.

...

Eventually, most likely after 2013, China will suffer a hard landing. All historical episodes of excessive investment—including East Asia in the 1990s—have ended with a financial crisis and/or a long period of slow growth. To avoid this fate, China needs to save less, reduce fixed investment, cut net exports as a share of GDP, and boost the share of consumption.

Read the Whole Article

Roubini tweeted a few times from his cell phone while on one of the trips to China he described in his article (these should be read from bottom to top).

I replied to Roubini with this comment:

Nouriel didn't reply to this, of course. But I'd like to hear his response to what I said.

I'm finding that when pundits are limited to the eastern seaboard of China - basically from Beijing to Shanghai on down to Guangzhou - they often feel as though China's over-invested in infrastructure (while some people who've never been to China really don't like China's method of development).

It is certainly true that China is developing unlike other countries in the present or the past. The more I watch China, though, the more I think that I see method in the madness: China is impossible to compare to any previous developing or currently developed country. They are simply playing by a different set of rules.

While there are cities in China with unbelievably developed infrastructure, there are hundreds of places throughout the interior of the country that have a long ways to go in terms of creating an adequate foundation. There is still so much of the country that is shockingly "backwards" in terms of infrastructure.

China is a big country. It's impossible to get a picture of China by looking at one city or one small region of the country. The skyline of Shanghai is certainly seductive, but one needs to counter-balanced its sleekness with a visit to a dusty third-tier provincial city in northern China or a mountain village in western China without a paved road.

Nobody knows whether China's bold actions such as high-speed rail, sprawling airport construction, and dozens of subway systems are going to be the path to greatness or the ultimate white elephants. But it is safe to say that there are hundreds of millions of Chinese people whose lives are changing very rapidly. And with those changes are going to be a new set of expectations: the freedom of leisurely travel, big-city life, and things to spend their disposable income on.

Developing the way China is developing is making more and more sense to me. It's hard to wrap one's mind around because what China's doing has never been done before. I understand the skepticism of China's methods of development. But personally, I wouldn't bet against their ultimate success.

Visualizing the Chinese and US Economies

The Economist has a great map showing just how much China's economy has developed. Each province in China is labeled with the corresponding country whose GDP it is equivalent to:



For an even more detailed map showing GDP per person, population, and exports from The Economist, click here.

Back in 2007, I found this map from a blog post at dailykos.com showing the same thing with US states:



This US GDP map is a couple years old so it might not be incredibly accurate right now. But I think it should generally hold true or be in the same ballpark.

It's funny to see the shared countries on the two maps:

- Nebraska and Inner Mongolia's economies are both the size of the Czech Republic's
- Virginia and Zhejiang are both the size of Austria
- Oklahoma and Beijing are both the size of the Philippines
- South Carolina and Hunan are both the size of Singapore
- New Mexico and Shanxi are both the size of Hungary
- West Virginia and Shaanxi are both the size of Algeria
- Kansas and Sichuan are both the size of Malaysia

The comparisons could go on.

A couple things of note: no Chinese province even comes close to US states like California, Texas, or Florida. In fact, there really aren't really any economic powerhouses on China's map at all. Also, when you compare a hugely populated province like Shandong (around 95 million people) to Switzerland (around 8 million people), a straight GDP number doesn't give a very meaningful picture of what the situation really is in the two places.

It'd be interesting to compare the populations of all of China's provinces with the population of the countries on the map. There's no way the countries on the map come close to China's 1.3 billion people.

Population disparities aside (China tends to screw up population-based comparisons), these maps do show just how dominant the winners of the world economy have been. The disparity between the haves and have nots has grown by leaps and bounds in the past few decades. This, I believe, is why we're seeing governments across the Middle East topple.

I'm watching everything in the Middle East with great excitement and trepidation. What happened in Egypt and Tunisia is incredible. What's going on in Libya, Bahrain, Yemen, Jordan, and other countries throughout the Arab world is frightening.

Democracy in the Middle East is going to be a long struggle. It's inspiring to think that 2011 could end up being a year that more than 100 million people were emancipated from autocratic rule. Saying that, there's no guarantee what will happen now that the strongmen at the top are gone. I hope that the US and other democracies around the world support any country striving towards honest and fair elections.

No matter what happens down the road, 2011 is shaping up to be a very historic year.

High Speed Rail

Things changed so much in Xi'an between 2006 and 2009 when I lived there. The pace of development is hard to comprehend. I know that when Qian and I go back to Xi'an this coming summer, after being gone for twenty months, there are going to be many parts of town that we won't recognize.

Reading a post from my friend, Richard, on his blog - Notes From Xi'an - I see that Xi'an has indeed added something major since I left: a high-speed rail station.


The Xi'an to Zhengzhou line high-speed rail station

Richard's post does a nice job giving basic information about the new "Xi'an North Station," highlighting the controversy surrounding the corruption of China's ousted high-speed rail minister, and discussing whether high-speed rail is really a wise investment. Check it out.

Chinese cities you've never heard of, but should know - Part 5

The city featured in this installment isn't a city yet. It is a cluster of cities in southern China that will one day in the not-too-distant future be, at 42 million people, the largest city in the world.

From The Telegraph:

City planners in south China have laid out an ambitious plan to merge together the nine cities that lie around the Pearl River Delta.

The "Turn The Pearl River Delta Into One" scheme will create a 16,000 sq mile urban area that is 26 times larger geographically than Greater London, or twice the size of Wales.

The new mega-city will cover a large part of China's manufacturing heartland, stretching from Guangzhou to Shenzhen and including Foshan, Dongguan, Zhongshan, Zhuhai, Jiangmen, Huizhou and Zhaoqing. Together, they account for nearly a tenth of the Chinese economy.

Over the next six years, around 150 major infrastructure projects will mesh the transport, energy, water and telecommunications networks of the nine cities together, at a cost of some 2 trillion yuan (£190 billion). An express rail line will also connect the hub with nearby Hong Kong.

"The idea is that when the cities are integrated, the residents can travel around freely and use the health care and other facilities in the different areas," said Ma Xiangming, the chief planner at the Guangdong Rural and Urban Planning Institute and a senior consultant on the project.

Read On

There's no doubt that there will be plenty of people willing to populate this new monstrosity. Tens of millions of people flock to Chinese cities every year. Everybody in China wants to get in on the new opportunities city life provides.

The audacity of this plan is startling. This project in southern China makes previous large infrastructure projects - the Panama Canal, the US interstate highway system, and even the Three Gorges Dam - seem like child's play. The logistics involved with creating such a vast "city" is on a totally different plane from previous man-made ventures.


Image of Shenzhen from Reuters

Reading this story today, I immediately thought of some of the words President Obama said last night in his State of the Union address. From near the end of his speech talking about the need for the US to become a more competitive nation:

We should have no illusions about the work ahead of us. Reforming our schools, changing the way we use energy, reducing our deficit — none of this will be easy. All of it will take time. And it will be harder because we will argue about everything. The costs. The details. The letter of every law.

Of course, some countries don't have this problem. If the central government wants a railroad, they build a railroad, no matter how many homes get bulldozed. If they don't want a bad story in the newspaper, it doesn't get written.

And yet, as contentious and frustrating and messy as our democracy can sometimes be, I know there isn't a person here who would trade places with any other nation on Earth.

The Entire Transcript

There's no question who these words were targeted towards. China is a challenge Obama has to deal with every day.

Obama spent last week schmoozing President Hu here in the US. He surely hears everyday from disgruntled voters out of work due to "jobs being shipped over to China." Forty-seven percent of Americans believe, incorrectly, that China's economy is the largest in the world.

I was moved by Obama's speech last night. I've seen many mock his "Sputnick-moment" rhetoric. I'm also not sure that the post-partisanship he's pushing for is going to last. But I appreciate the, to borrow a word I've already used in this post, audacity of what he said last night.

No matter what one thinks of Obama and his policies, he proved last night that he understands what has made the US what it is. His exhorting of innovation and ingenuity in the face of strong challenges from abroad was inspiring.

Is China's economy and world influence going to surpass the US in the coming decades? Most likely it will. Considering its population, it's not that surprising that it would. But even if it does, I think there's something to what Obama said in his speech.

China's economy can and will continue to boom. It will build cities and undertake projects that put America to shame. No matter how big it gets, though, China's citizenry is still not going to have basic rights that citizens of the US and other democracies enjoy. No amount of development or wealth creation will ever be able to make up for the basic freedoms denied in China.

A Nation of Wusses

The pace in which structures get built in China is staggering. Xi'an markedly changed in the three and a half years I lived there. I would often leave the city for a few days, come back, and be amazed to see a new building erected or road paved in the time I was gone.

This following viral video (h/t @elliotng) really captures what I'm talking about. The video is of a hotel in Changsha, the provincial capital of Hunan Province, being built in two days (literally):



This is an eye-opening video. It fits in nicely with a popular meme in the US right now: that the US is a "nation of wusses" and that China is "kicking our butts."

Last night, I hung out with Qian, my brother, and my roommate from college at our apartment. We watched the Sunday night NFL game of the week on a Tuesday night. The game in Philadelphia, Pennsylvania between the Eagles and Vikings had been pushed from Sunday night to Tuesday night because of snow.

Pennsylvania's governor, Ed Rendell, had a lot to say about the NFL delaying a football game because of bad weather:

"My biggest beef is that this is part of what's happened in this country," Rendell said in an interview on 97.5 radio in Philly. "I think we've become wussies. ... We've become a nation of wusses. The Chinese are kicking our butt in everything. If this was in China do you think the Chinese would have called off the game? People would have been marching down to the stadium, they would have walked and they would have been doing calculus on the way down."

This is a rather bombastic statement from Rendell. My old roommate from college, who lives in DC, commented that Rendell is notorious in political circles for bloviating and loves to hear the sound of his own voice.

I don't think Rendell's words are all that accurate.

Chinese people often get very worked up about weather. From my experiences of living in the middle of the US and the middle of China, Americans are not wusses when it comes to weather and braving the elements. While I get what Rendell was going for, he's off base.

First, domestic sports leagues are just not that popular and don't hold the same value in Chinese society as they do in the US. There is no comparison in China for something like an NFL night game in Philadelphia. And second, Chinese people would not pay boat loads of money to voluntarily sit in mind-numbingly hostile conditions to watch sports. I don't see any city in China packing 60,000+ people into a stadium to watch a sporting event in a blizzard.

All that said, the rapid development in China and the US' economic sluggishness scares a lot of Americans. The video above is a beautiful portrait of what the US is envious of China for. We pride ourselves on being hardworking and industrious. Seeing a different country beat us at our own game (and Communist China of all places) stirs up great emotion. I sense nostalgia for the way things were in the US post-WWII both in the media and in daily interaction with family and friends. I think Rendell is grasping for those "good old days" when the US was the economic engine of the world in his comments from the other day.

Things have changed. I don't see those heady industrialist days ever coming back to the US. That's a difficult pill for many Americans to swallow. But even if those days are gone forever, I don't think the US is done for as a country or an economic powerhouse. Although frustratingly sluggish, the US economy continues to churn. We went close to the brink, but did not collapse. We, as a nation, need to adjust our priorities, expectations, and, most importantly, education system. Wusses we are not, though.

Ant Tribes

It is a terrible time to be a fresh college graduate looking for a job. Even in China.

I'm going to highlight three pieces in the western media on "ant tribes" (蚁族), the term referring to the millions of college-educated young Chinese people looking for work, that I've seen in recent days.

First, an article from The New York Times:

Photo from Newsweek (see below)

BEIJING — Liu Yang, a coal miner’s daughter, arrived in the capital this past summer with a freshly printed diploma from Datong University, $140 in her wallet and an air of invincibility.

Her first taste of reality came later the same day, as she lugged her bags through a ramshackle neighborhood, not far from the Olympic Village, where tens of thousands of other young strivers cram four to a room.

Unable to find a bed and unimpressed by the rabbit warren of slapdash buildings, Ms. Liu scowled as the smell of trash wafted up around her. “Beijing isn’t like this in the movies,” she said.

Often the first from their families to finish even high school, ambitious graduates like Ms. Liu are part of an unprecedented wave of young people all around China who were supposed to move the country’s labor-dependent economy toward a white-collar future. In 1998, when Jiang Zemin, then the president, announced plans to bolster higher education, Chinese universities and colleges produced 830,000 graduates a year. Last May, that number was more than six million and rising.

It is a remarkable achievement, yet for a government fixated on stability such figures are also a cause for concern. The economy, despite its robust growth, does not generate enough good professional jobs to absorb the influx of highly educated young adults. And many of them bear the inflated expectations of their parents, who emptied their bank accounts to buy them the good life that a higher education is presumed to guarantee.

“College essentially provided them with nothing,” said Zhang Ming, a political scientist and vocal critic of China’s education system. “For many young graduates, it’s all about survival. If there was ever an economic crisis, they could be a source of instability."

Read the Entire Article

Here is a short video from the author of the article:



Several of my Chinese friends and colleagues from Xi'an had jobs similar to the ones described in this piece. Salaries of around 1,500RMB (or about $220) a month or less. Shared living quarters in "city villages" (城中村), cramped and inexpensive areas of cities with very low-rent units. Few prospects for upward mobility.

The job situation for college educated youths in China are, in many ways, just as bad as they are for young people in the US.

I'm pretty sure most Americans attribute employment problems to the sluggish US economy. But China's "ant tribes" suggest that the problem is not only because of slow growth. Even booming countries have this problem for young people right now.

This afternoon after work (I'm so thankful to not be part of the US' "ant tribe" right now), I heard a story on NPR about life inside of Foxconn's factory in Shenzhen:

Foxconn, the Taiwanese company that manufactures iPhones and iPads, was in the news this year as more than a dozen factory workers leaped to their deaths. NPR's Melissa Block talks with Bloomberg Businessweek reporter Frederik Balfour, who spent time at the Foxconn plant in Shenzhen, China, about what the company's response has been, and how effective it's been.

You can download the audio of this story here.

The story of suicides at Foxconn's factory in Shenzhen from earlier this year were a symbol of a larger problem in Chinese society. Young people living far away from their families, insanely long hours, and a low tolerance for mistakes are among the many pressures involved with factory life in China. It goes without saying, but the lives of those on the ground floor of the Chinese "economic miracle" are arduous in a way that is impossible for many western people to imagine.

And lastly, Newsweek has a photo gallery of ant tribes in Beijing. The photo above on the New York Times story is from this collection. The photos below are too. All of them are really well done:







It's not easy being a young person looking for work anywhere in the world right now. Expectations across the globe are as high as they've ever been. Young Chinese people want a piece of big city life and the riches millions are beginning to reap. They have an opportunity that their parents did not have. Unfortunately, it seems that higher education, the path most often prescribed to "get ahead," is not a guarantee of financial success, though.

Breaking the Gridlock

I work at a reverse-logistics company. I'm learning a lot about the trucking industry and moving freight. It's a whole different world than anything I'd ever been exposed to before. I'm really liking it.

I sent out an email to my boss and colleagues the other day about this following story. We all got a kick out of it.

From Bloomberg:

Aug. 24 (Bloomberg) -- Chinese demand for coal to produce electricity for the world’s fastest-growing major economy is creating traffic jams lasting as long as nine days on roads connecting mines in the nation’s hinterland to its eastern ports.

Thousands of trucks were stuck along the Beijing-Tibet Expressway for as many as nine days, China Business News reported today. The blockage, which began to ease yesterday, was created by a surge in trucks carrying coal from the province of Inner Mongolia, the newspaper reported. Road maintenance since Aug. 19 has been a major cause of the congestion, the Global Times newspaper said today.

Inner Mongolia passed Shanxi province last year to become China’s biggest coal supplier after the government closed mines on safety concerns following a series of deadly accidents in Shanxi. A dearth of railway capacity connecting Inner Mongolia to port cities such as Caofeidian, Qinhuangdao and Tianjin, where coal is shipped to power plants in southern China, has forced suppliers to rely on trucks.

“The situation may ease in three or four years, when rail capacity from Inner Mongolia to Caofeidian gets upgraded and the new rail line to Liaoning province starts,” David Fang, a director at the China Coal Transport and Distribution Association, said by telephone today.

Read On

A traffic jam that is 62 miles long and has already spanned nine days. Only in China.

This story of the "expressway" outside of Beijing being plugged up is coupled nicely with this one I found on Beijing's city traffic from China Daily:

Image from Bluetechblog.com

BEIJING - Average driving speeds in the Chinese capital will likely drop below 15 km per hour in five years if the number of vehicles continues increasing while no further measures are taken, said a Beijing transport official here on Monday.

Guo Jifu, head of the Beijing Transportation Research Center, made the remark at a symposium to discuss the city's traffic problems.

He said the number of vehicles on the road increased by 1,900 per day on average in the first half year. If the growth rate continued, the total number of vehicles would hit 7 million by 2015.

He warned that the city's road networks could only accommodate 6.7 million vehicles, given the current ban keeping private cars off the road one work-day a week in the urban areas remained.

Read On

As a caveat, I heard a report this morning on NPR from Louisa Lim saying that car sales (as well as real estate) are way down over the past few months. So some of the projections on this article from China Daily may not come to fruition. But there is no denying that China's car industry has been BOOMING and will continue to grow at incredible rates into the future. And the trucking industry, highlighted by that traffic jam up above in the first article, shows just how many semi-trucks are moving freight on China's roads.

Last year, China committed a ton of its stimulus money to infrastructure. It's obvious that China is in desperate need for better roads, rails, and other means of transportation that will allow its economy to continue on the pace it's been, and will continue, growing.

Money spent on infrastructure in China is money well-spent. There have already been massive improvements - I could see them with my own eyes in the 3.5 years I spent in Xi'an from '06 to '09 - but there still need to be a lot more money invested.

As the foundation of China's transportation, and, thus, economic backbone, gets stronger, China's growth will continue to be pace ahead of the rest of the world's well into the future.

Real Estate Music Video

I heard an interesting piece on Public Radio International's The World this evening about young people's frustrations with China's real estate market. You can listen to the story here. The story is a bit sensationalistic - the comments of people wanting blood and to go out with a bang and Andy Xie's comments - but I still appreciated it.

Here is the music video that is discussed in the radio piece (it's in Chinese):



This music video reminds me a lot of the show I reviewed a couple months ago - 蜗居 - although this video is significantly more blunt.

I've talked many times over the past couple years about China's real estate market. I've been much gloomier about it in the past than I am now. Prices are still outrageous in big cities like Beijing, Shanghai, and Shenzhen, but things appear to be calming down a bit. And in places like my old home Xi'an, prices aren't that insane (relatively speaking).

Things are still out-of-whack and will continue to be so throughout much of the country even if prices don't go higher. I think there is a lot of truth to the messages of 蜗居 and this music video. The masses cannot afford housing in many urban centers and rich people are buying multiple apartments and leaving some empty. This is very tough for young men wanting to marry (owning an apartment is a prerequisite for marriage), for couples wanting to settle down, and scores of other people.

But I'm becoming convinced that things will cool down and that a popped real estate market isn't going to mean the same thing to China as it has to the US. China's economy is still going to be strong, the country will continue to grow, and people's lives will continue to improve even if real estate is no longer seen as a hot speculative investment. I'm beginning to agree with what author Zachary Karabell told me last year, "a popped real estate bubble in China isn't going to be derailing."

China's New Tomorrowland

I wrote a short overview of Chongqing a few weeks ago. Chongqing is at the very top of the list of incredible places in China. Foreign Policy just put up a stunning photo exploration of the city that is, "growing faster than mapmakers and even government officials can track." Go check out the photos. Try to wrap your mind around this model of the city that is already "hopelessly out-of-date."

Chinese cities you've never heard of, but should know - Part 4

This installment of "Chinese cities you've never heard of, but should know" isn't actually about a city. It's about Huaxi Village, a village one hundred miles north of Shanghai in Jiangsu Province.



Huaxi Village touts itself as the "Number 1 Village in China." Here is an article from the Guardian on why the village feels so proud:

China's road to riches could not be more boldly signposted than it is in Huaxi, officially the country's wealthiest village. Take the municipal government's stretch limousine across Textile Bridge, pass the smokestacks of the steelworks, speed alongside row after row of symmetrical pale-blue houses, skirt the 15-story pagoda hotel and then alight for a walk down the red-carpeted corridor of capital.

This concrete-covered passageway is a monument to the giddy material progress made by the commune since China's policymakers began mixing their ideological drinks 26 years ago.

None went as far as Huaxi in combining the strict political control of the ruling Communist party with the get-rich-quick economics of the market - and the results are being hailed as a model for the nation to follow.

To demonstrate how good that cocktail is supposed to make the locals feel, "Huaxi Road" is decorated with smiling pictures of every family in the village.

Each household's assets are listed in detail: size of the family, value of their property, average level of education, number of members of the Communist party, as well as how many cars, mobile phones, televisions, washing machines, computers, air-conditioning units, motorbikes, cameras, fridges and stereo systems they own.

At first sight, the figures seem to justify Huaxi's boast to be the "number one village in China". Since 1995, when Huaxi became the first commune in China to list shares on a stock exchange, local businesses, mostly in textiles and steel, have taken off. Their spectacular expansion has made even the national average growth rate of 9% a year seem laggardly. In 2003, the village reported the combined turnover of its companies at 10bn renminbi (about £640m). Last year, it hit 26bn - and by 2008 it is expected to double again.

This has turned residents - all still officially registered as peasants - into wealthy industrialists. Elsewhere in the country, the annual average disposable income of urban dwellers only recently passed $1,000 (about £530). In the countryside, the figure is two thirds lower. But Huaxi's residents get a yearly salary of $1,500, a bonus of $10,000 and dividends of $25,000.

Twenty years ago, most were farmers living in small, one-storey houses, who struggled to save the money to buy a bicycle. Now, they are shareholders with an average living space of more than 450 square metres and at least one family car.

Read On

This article is dated. It is from 2005. Five years is a long time anywhere. But it's a really long time in contemporary China. One important thing has occurred since this story was written; Huaxi Village has embarked upon building two of the tallest skyscrapers in the world.

From The Wall Street Journal:

In China, bigger is almost always better, even in small towns, and Huaxi, a formerly rural village in the eastern part of the country, is no exception.

Huaxi has long been heralded as a symbol of China’s successful transition from communism to capitalism. It calls itself “the No. 1 village in China” and boasts of being the country’s wealthiest village, with an annual per capita income of 80,000 yuan (about $12,000), according to Xinhua. Now, it appears that Huaxi has a new ambition: to become the “tallest village,” not just in China, but in the world.

Officials in the town are currently building a 74-story, 1,100 foot tower to house up to 2,000 residents, at a cost of 2.5 billion yuan ($370 million), the Guangzhou Daily reports (in Chinese here). Planned amenities include five clubhouses and “sky gardens,” 24-hour concierge services, 35 elevators and a revolving restaurant at the top of what’s slated to be the 15th-tallest building in the world. The tower, named “New Village in the Sky,” will be completed in June, but marks only the starting point of the village’s dreams. Next year, construction will commence on an even taller building, the 1,800-foot Huaxi Dragon Plaza (And for this plaza, the total investment will be around 6 billion yuan, and the government is to divide the total 6 billion yuan into 600 shares, with each share 10 million yuan).

Local party secretary Wu Xie’en, told the Guangzhou Daily that he hopes that the skyscrapers of Huaxi will become a major tourist attraction. He also cites a more pressing motive for building upwards: conservation of land resources. Huaxi’s rich residents have long favored sprawling mansions — up to 5,000 square feet in size, huge by Chinese standards– to house several generations under one roof, cutting into the supply of land available for industry and agriculture.

Read the entire article

The excellent blog, Chinasmack.com, translated a Chinese news report from earlier this year on the first skyscraper that is already being built. Here is a clip of that article:

Designed in accord with a 5-star hotel standard, with a construction area of 200,000 square meters, it can accommodate more than 2000 residents, with a dining capacity of 3000, and having the largest 360 degree revolving restaurant in Asia. Inside the building contain 35 elevators, with speeds of 10 meter per second, the fastest in the world, in addition to having the world’s most advanced monitoring and fire safety equipment.”

You must be having a hard time imagining that a “socialist new village” is building this soon-to-be completed luxury tower. In Jiangyin Huaxi village, this building with height ranked number 8 in China, and number 15 in the world will be completed in June of this year.

...

The tower has five sky gardens with five levels in accordance with the Five Elements of Gold, Wood, Water, Fire, and Earth as each level’s theme. Inside contain 35 elevators, with speeds of faster than 10 meters per second, among the top in the world. The form of the tower will be the shape of a “Three-footed tripod”, the center will top out with a 50-meter sphere, as if it is a dazzling pearl.

The tower is also named “The new village in the sky” with a special meaning attached. Wi Xie’en said, “People’s impressions of rural villages were always low-rise buildings, now we must make a breakthrough, even rural villages can break this old impression and create a village in the sky.”

After investigation, this tower originally was planned to cost RMB 1.5 billion, but from the looks of the current situation, after renovations and decorations, it will cost at least RMB 2.5 billion to complete.

Read the entire translation

I have no idea what to say about this hamlet on steroids.

The development going on in Huaxi Village is a good rorschach test for what one thinks of China's break-neck economy. Some will say that such seemingly wasteful and misallocated use of energy and resources will be the undoing of China ("Dubai times 1,000") while others will surely see it as China forging ahead (hooray for Technocracy!).

I don't even want to bother weighing in on these kinds of economic matters any more. I've been bearish in the past on China's development and my natural instinct is to think that this Huaxi experiment is insane. But China's sustained economic development has impressed me. I'm just going to go with "a little from column A and a little from column B" on Huaxi for now.

Regardless of what one thinks of what is going on Huaxi Village, there's no doubt that this little dot on the map deserves to be on a list of places that could only exist in the present-day Middle Kingdom.

Panoramas

Saw this link the other day. Shanghai's skyline in 1990 and today (h/t Gizmodo):


That's pretty striking for twenty years.

I'm going to use this post as an excuse to get a few of my favorite panoramas that I took in China on the internet:


Larger resolution link

This photo is from one of my favorite places on earth, Hua Shan, in 2008. The clouds below us engulfing the mountains. Unreal. Another interesting thing about this photo is my friend, Andy, on the far left. He is taking a picture off the edge of a cliff. He's easy to miss unless you're looking for him.

Larger resolution link

This is from the Jinshanling to Simatai section of the Great Wall. I took this photo in 2006.

Larger resolution link

This photo is of The Big Wild Goose Pagoda in Xi'an. I lived about a two minute walk from this pagoda and walked/rode my bike past it every day when I went to work. Every night at the pagoda they had a water show. I like the remnants of a firework blast on the left side of this photo.

I took these photos with my Canon G2 camera. I used the Canon software "Photostitch" to create them. Basically, I just took a handful of individual photos on a certain setting on the camera and then "stitched" them together on the computer. Not a perfect way of creating wide angle shots. The pagoda picture, in particular, doesn't look too professional. But I can't complain with these results. They show how far amateur photography has been advanced by digital cameras.

Remoteness

For our Memorial Day weekend, Qian and I went to central Missouri for a weekend of canoeing and camping with several of our friends. My friends from high school and I have been heading down to the Niangua River in Ozark country for about a decade now. It's always great times. This weekend was no different. There's really no downside to campfires, cabrewing (coolers full of beer on an eight mile, day-long canoe trip), and Missouri's unique topography.

This past weekend was the first time Qian and I had been outside of the Kansas City area since our honeymoon in St. Petersburg, Florida last September. Being unemployed and then freshly hired isn't conducive to travel. Regardless of the circumstances, it sucks that we haven't been able to travel more. Especially considering how much traveling I did while I was in China.

Although I've been stuck in Kansas City, my mind often floats to other parts of the world.

One of my favorite things to do when I'm bored and at a computer is go onto Google maps, find interesting places in the world, and then look those places up on Wikipedia to learn about their culture and history. For whatever reason, I often end up looking at islands in the middle of the Pacific Ocean and remote areas in the Northwest Territories of Canada.

A few days ago while looking up information on Alert, Nunavut in Canada (the northern most permanently-inhabited place on earth), I found the following random link - The Top 10 Most Remote Places on Planet Earth. I was really impressed by this list. It spanned the entire globe and introduced me to a number of places I've never heard of.

Number two on the list particularly caught my eye:

2. Motuo County, China

Considered the last county in China without a road leading to it, Motuo is a small community in the Tibetan Autonomous Region that remains one of the few places in Asia still untouched by the modern world. Just getting to Motuo is a Herculean task, as travelers must follow a grueling overland route through frozen parts of the Himalayas before crossing into the county by way of a 200-meter-long suspension bridge. The county is renowned for its beauty—Buddhist scripture regards it as Tibet’s holiest land—and it is said to be a virtual Eden of plant life, housing one-tenth of all flora in China. Despite its stunning geography and natural resources, Motuo still remains something of an island unto itself. Millions of dollars have been spent over the years in trying to build a serviceable road to it, but all attempts have eventually been abandoned because of mudslides, avalanches, and a generally volatile landscape. As the story goes, in the early 90s a makeshift highway was built that led from the outside world into the heart of Mutuo County. It lasted for only a few days before becoming un-passable, and was soon reclaimed by the dense forest. Photos: http://news.cultural-china.com

Read the Entire List

This place sounds really cool. Finding such remoteness in China, a country with the largest population and with a rapidly improving infrastructure, is surprising. Even in treacherous Tibet. I'd never heard of Motuo County and was happy to do some research on the place.

Here are some other interesting links on the Motuo, or Medog in Tibetan, County:

Image from Wikipedia

- An article on a guest house operator from China Daily
- A little bit of info on hiking Medog
- And, of course, articles from 2009 that to the county and that Medog now has 3G phone service!!

Argh! There is no remoteness anymore!!

I'm being somewhat facetious here. I'm sure that roads and 3G will be great for the people actually living there. But still, such modern advances have to take out a lot of the romance of visiting such a hard-to-get-to place.


I've been planning on writing something on Medog County for a couple weeks now. As it happens, my friend, Taylor, sent me an email today with some information about another incredible-looking, isolated place in southwest China.

The next remote place in southwest China that I'd never heard of before that I would love to now visit is Lexiaguo in Yunnan Province:











These images were sent to me in a chain email and I'm not real clear on who actually took these.

Here is the write-up that accompanied the chain email:

Lexiaguo - southwest of Kunming in Yunnan, China.

It is located in the southwestern part of Kunming, 2600 ft. above sea level, a remote area.
Because of its lack of infrastructure and inadequate transportation and lodging, most travel agencies would not think of going there.

But for those who have seen the pictures of the Red land, no one can resist being attracted to its beautiful scenery!

It looks like another blogger also received this chain email. ElaineR has a lot of good information on Lexiaguo (actually Laxiagou), or better known as Dongchuan Red Land (东川红土地). It turns out the chain email wasn't 100% correct. First, they got the name wrong. Second, Dongchuan is a place that travelers can get to.

I'm glad I received this email with these pictures. I learned something new today. But ElaineR's digging around on this email points out the factual inaccuracies that are common with chain email-types of information spreading.


Image from Wikipedia

I've been to Yunnan, specifically to Dali, Kunming, Tiger Leaping Gorge, and Kunming. I didn't even know about Dongchuan and, obviously, didn't go. It doesn't sound like Dong Chuan is nearly as remote as the chain email makes it sound to be though. I'm sure it's not an easy place to visit. But surely is no Medog County. And even Medog County doesn't sound that remote any more.

I'm not really sure what the point of this post has ended up being. Another one of my meandering posts. I guess it's just highlighting two places that I've never been to, just found out about, and hope to one day have the chance to visit.

Traveling makes life colorful. I'd somewhat forgotten that not having traveled at all recently. I hope that Qian and I have some more time to get out of KC and see more of America in the coming months.

India and China and the Meaning of GDP

There's been discussion a couple times in the comments sections on this blog about the economic development going on in India compared to China's. Comparing the two countries is interesting since both Asian countries have populations over 1 billion and are beginning to get things turned around.

I heard a nice discussion about the two countries on NPR a couple days ago:

Image from Time

MICHELE NORRIS, host: It's been said, most notably by Winston Churchill, that democracy is the worst form of government, except for all the others. But while India has the world's largest democracy, it also has widespread poverty and a host of other economic problems. And now some Indian citizens find themselves looking enviously at a neighbor that has a very different sort of government: China.

David Kestenbaum with our Planet Money team brought back this story from India.

DAVID KESTENBAUM: You know how you take a trip, and sometimes the most interesting thing is that it makes you see your home differently? That happened to newspaper columnist Karan Thapar. He recently left his home - India's capital, Delhi - which can feel kind of crowded and broken down. He went to China, Beijing, and what he saw made him jealous.

Mr. KARAN THAPAR (Newspaper Columnist): There was nothing that I could find that seemed poor or Third World or shabby or dirty. The buildings are immaculate, they're resplendent. The roads are eight-lane wide and awe inspiring.

KESTENBAUM: It was particularly painful, he says, because if you think of the two countries in a race, when the starting gun fired, they were both at the same place. In the late 1940s, India became independent, and the People's Republic of China was born. Both were equally poor then, but in the race, China is now way out in front.

Both countries are about the same size, over a billion people, but China is three times richer.

Read or Listen to the rest of this story

On the one hand, you have a "benevolent dictatorship" bringing the masses of China up from poverty. On the other hand, you have a representative democracy not steering things in India quite as effectively.

Glorifying the Chinese Communist Party for its economic successes (see Thomas Friedman) can be tiring. But at the same time, one has to give credit where credit is due. China's economy is growing like crazy while much of the world's is in bad shape. The Chinese government is very swift and decisive. And its people are benefiting a lot from its decisions.

Besides China though, one-party states have a very poor track record on economic development. At the end of the NPR story, they mention that China's rise is unique amongst non-democracies. There does, in fact, appear to be something to the notion of "capitalism with Chinese characteristics."

One thing Chinese leaders love to point to is the country's sustained and robust GDP growth. Averaging over 10% GDP growth for a decade is, indeed, impressive. But what does GDP growth actually mean? How does that GDP percentage number we hear all the time relate to life on a daily basis?

A New York Times Magazine article from a week or two ago asks this question and had a very insightful discussion.

Here are a couple sections of the article that I particularly appreciated:

Image from Google
...

But criticisms of G.D.P. go deeper than just its use, or misuse, by politicians. For years, economists critical of the measure have enjoyed spinning narratives to illustrate its logical flaws and limitations. Consider, for example, the lives of two people — let’s call them High-G.D.P. Man and Low-G.D.P. Man. High-G.D.P. Man has a long commute to work and drives an automobile that gets poor gas mileage, forcing him to spend a lot on fuel. The morning traffic and its stresses aren’t too good for his car (which he replaces every few years) or his cardiovascular health (which he treats with expensive pharmaceuticals and medical procedures). High-G.D.P. Man works hard, spends hard. He loves going to bars and restaurants, likes his flat-screen televisions and adores his big house, which he keeps at 71 degrees year round and protects with a state-of-the-art security system. High-G.D.P. Man and his wife pay for a sitter (for their kids) and a nursing home (for their aging parents). They don’t have time for housework, so they employ a full-time housekeeper. They don’t have time to cook much, so they usually order in. They’re too busy to take long vacations.

As it happens, all those things — cooking, cleaning, home care, three-week vacations and so forth — are the kind of activity that keep Low-G.D.P. Man and his wife busy. High-G.D.P. Man likes his washer and dryer; Low-G.D.P. Man doesn’t mind hanging his laundry on the clothesline. High-G.D.P. Man buys bags of prewashed salad at the grocery store; Low-G.D.P. Man grows vegetables in his garden. When High-G.D.P. Man wants a book, he buys it; Low-G.D.P. Man checks it out of the library. When High-G.D.P. Man wants to get in shape, he joins a gym; Low-G.D.P. Man digs out an old pair of Nikes and runs through the neighborhood. On his morning commute, High-G.D.P. Man drives past Low-G.D.P. Man, who is walking to work in wrinkled khakis.

By economic measures, there’s no doubt High-G.D.P. Man is superior to Low-G.D.P. Man. His salary is higher, his expenditures are greater, his economic activity is more robust. You can even say that by modern standards High-G.D.P. Man is a bigger boon to his country. What we can’t really say for sure is whether his life is any better. In fact, there seem to be subtle indications that various “goods” that High-G.D.P. Man consumes should, as some economists put it, be characterized as “bads.” His alarm system at home probably isn’t such a good indicator of his personal security; given all the medical tests, his health care expenditures seem to be excessive. Moreover, the pollution from the traffic jams near his home, which signals that business is good at the local gas stations and auto shops, is very likely contributing to social and environmental ills. And we don’t know if High-G.D.P. Man is living beyond his means, so we can’t predict his future quality of life. For all we know, he could be living on borrowed time, just like a wildly overleveraged bank.

...

Most frequently in our conversations, Stiglitz gravitated to the philosophical questions of measuring progress. What are the best indicators beyond G.D.P.? How do you actually pick the most important ones? As Stiglitz recounted, Sarkozy gave the commission freedom to tear apart G.D.P. as its members saw fit. No doubt, the French president saw political advantages in the undertaking. With a more comprehensive set of indicators, a leader trying to steer a course through a faltering economy could conceivably point to successes in areas other than jobs or productivity. “I can tell you what Sarkozy told me about what motivated him,” Stiglitz said. “What he said was that he felt this tension — he is told to maximize G.D.P. but he also knows as a good politician that what people care about are things like pollution and many other dimensions to the quality of life. Those dimensions aren’t well captured in G.D.P. And that puts him in a difficult position. When he comes up for election, people are going to grade him on G.D.P., but people are also going to grade on the quality of life. And so he sort of said, Can’t you in some way resolve this tension by constructing measures that don’t pose these dichotomies?”

...

Suppose you’re driving, Stiglitz told me. You would like to know how the vehicle is functioning, but when you check the dashboard there is only one gauge. (It’s a peculiar car.) That single dial conveys one piece of important information: how fast you’re moving. It’s not a bad comparison to the current G.D.P., but it doesn’t tell you many other things: How much fuel do you have left? How far can you go? How many miles have you gone already? So what you want is a car, or a country, with a big dashboard — but not so big that you can’t take in all of its information.

Read the Entire Article

Listening to the news, we often hear GDP statistics. The United States had a GDP of 5.4% in the last quarter of 2009 and 3.2% in the first quarter of 2010. But from what I hear and understand of what's going on in the US economy outside of news reports, those numbers don't seem to have much connection with reality. Generation Y can't find work, Generation X is facing a serious recession during their prime-time working years, and Baby Boomers can't retire or sell the suburban houses they purchased in route to achieving the American Dream.

Taken at face value, those recent US GDP numbers of sound pretty decent. Factor in the context of the life outside of the numbers though and they don't seem as meaningful.

I think this same principle of looking at GDP compared to "real life" in China leads to similar results.

China's economic miracle continues (11.9% in the first quarter of 2010). Millions of people's lives are improving. Whether that improvement comes in the form of migrant workers working in a factory, a family owning a small store front, or international business going on in a first-tier city, there is a lot of great stuff going on in China right now.

Despite all of the great economic growth though, life in China can be difficult and confusing.

Evan Osnos, a China writer for The New Yorker, wrote the following when discussing the continued school attacks that've been going on in China recently:

Whatever the combination of marginalization and mental illness, these cases are a reminder of how disorienting Chinese life can be in 2010. For those already fragile, there is not much to lean on. A Xinhua story about Zheng Minsheng, who murdered eight children outside their primary school last month, described him as “a ‘loser’ without a job or a wife and already middle aged.” Perhaps the best diagnosis of this phenomenon comes from an unnamed twenty-eight-year-old factory worker that a Los Angeles Times reporter encountered at the hospital in Taixing after the attack there Thursday: “This man was obviously sick,” the worker said. “But our society is very complicated. The economy has changed so quickly. It is hard to know where you are.”

Read the entire article

GPD tells us how fast our economies are going. But it fails to tell us much of anything else. Knowing the speed at which one is traveling is, obviously, important. There's a lot more to the health of a nation and its people though.

Chinese cities you've never heard of, but should know - Part 3

Ordos, a city in Inner Mongolia, is arguably growing faster than any other city in the People's Republic of China. In the middle of the Ordos Desert, the city already boasts the second highest per capita income in China (after Shanghai).


Image from Wikipedia

Ordos' wealth largely comes from its natural resources. The Ordos region has 1/6th of all the coal reserves in China. It also is where most of the cashmere in China comes from. Here is an article from the Ordos government's website on the city's natural bounty:

Ordos is abundant with resources, among which the most well-known are Sheep, Coal, Kaolin and Natural Gas. Aerbasi cashmere, known as “fiber diamond” and “soft gold”, is noted for its long and thin fiber. The annual output of Aerbasi cashmere in Ordos is more than 700,000 kgs, and the annual production capacity of cashmere sweaters exceeds 8,900,000 pieces, which are exported to places all over the world.

Ordos has 149.6 billion tons of proven coal reserves, accounting for about one-sixth of the total amount nationwide and half of the entire quantity in Inner Mongolia. Ordos coal enjoys the advantages of low ash, low sulfur, low phosphorus and high heat output, thus was recognized as “clean coal” by Chinese and foreign experts. Till now the coal mines developed include mainly Zhungeer, Dongsheng, Wanlichuan and Xizhuozishan. In 2007 a total 198.5 million tons of coal was produced.

Read the Whole Article

While rich in natural resources, the Chinese government is also investing a lot of human capital into the the region as well.

Ordos is set to build the largest solar power plant in the world. Here is a small blurb about the proposed solar plant from last September in gizmag:

In the midst of overwhelming debate over climate change - an issue that seemingly paralyzes politicians - the Chinese government has announced its intention to construct a 2-gigawatt solar power plant in Ordos City, Inner Mongolia. Mike Ahearn, CEO of the Arizona-based company which will construct the plant, describes the unprecedented project as “an encouraging first step forward toward the mass-scale deployment of solar power worldwide to help mitigate climate change concerns.”

...

The magnitude of the development is many times greater than any solar plant in operation or even contemplated, including projects such as the 290-megawatt Starwood Solar I and the 500-megawatt solar thermal project in the Mojave Desert.

If successful, the Ordos plant will cover a staggering 25-square miles, cost billions of dollars and power 3 million Chinese homes.

Read the Whole Article

In addition to the solar plant, the Chinese government has invested massively in a new section of Ordos called Kangbashi. Local officials are hoping that their development of Kangbashi's infrastructure will one day allow its residents to have the same luxurious lifestyle that the wealthy in Shanghai, Beijing, and other more developed cities currently enjoy.

The build up of Kangbashi is controversial. It's questionable because, well, nobody lives in this district that is being fiercely developed:

First, an article on the building of Kangbashi from Foreign Policy:

In the gritty Inner Mongolian wind, I stood at the pinnacle of the global economy, at least in terms of GDP growth: the main drag of one of the fastest growing cities in the fastest-growing region in all of China, the world's supposed new economic powerhouse.

Built in a breakneck five years, Kangbashi is a state-of-the-art city full of architectural marvels and sculpture gardens. There's just one thing missing: people. The city, built by the government and funded with coal money, its chief industries energy and carmaking, has been mostly vacant for as long as it has been complete, except for the massive municipal headquarters. It's a grand canyon of empty monoliths. In a paradox only possible in today's economic system, Kangbashi manages to be both a boom town and a ghost town at the same time.

Kangbashi represents a particularly destructive economic force at work in China today: an obsession with GDP that ignores all other metrics of progress or human capital. GDP as calculated in China -- or the rest of the world, for that matter -- doesn't make any distinction between quantity and quality, or between creative and destructive expenditures.

...

Still, China's emphasis on growth at all costs is creating some bizarre monsters, and Kangbashi is one of them. Six years ago, Ordos county officials decided to move their headquarters out of old, cramped Dongsheng and into land that was then occupied by two small villages inhabited by about 1,400 people. By the end of 2008, the new district of Kangbashi was crisscrossed with 2.4 billion yuan ($352 million) worth of roads. Officials initially said they expected the population to reach 100,000 this year and 300,000 by 2020. They also say the population reached 50,000 last year, which seems improbable given that pedestrians on the street were outnumbered by street sweepers. A local real estate agent, Cao Ting, told me it had actually been easy to sell apartments. She said 80 percent of the apartments had been sold. I believed her even though 80 percent of them looked empty, with no curtains or furniture visible during the day and no lights on at night. The buyers were mostly investors or future residents waiting for schools and hospitals to open before moving in.

Read the Whole Article

Second, a video from Al Jazeera on the ghost town:



And third, a photo-essay on Kangbashi from Time Magazine (click the link for all fourteen of the images):







On the second page of the Foreign Policy article from above about Kangbashi, it says the following:

The new buildings look great from the outside, and they're economically fine on paper, if you believe the local government. And they may continue in this state, since the government will prop up the property market because it holds up so much else as well. Local governments' revenues are completely dependent on land sales. Eventually, perhaps, the population will catch up with this accelerated development.

I'm not sure what that long-term implications of the break-neck development Kangbashi and Ordos are. I find such wild development troubling. The construction is being propagated by a system - both government and private - that is almost utterly dependent upon making money through eating up and developing real estate. Such an economic system is predicated on higher and higher real estate prices going forward. Being an American who's witnessed the folly of such practices, I'm weary of this kind of stuff.

Saying that, I wouldn't bet against those apartments filling up with people in the coming years. Of course, China's economy needs to continue to boom and its people need to get richer and richer for that to happen. But at this point, it looks like China's economy is immune to the economic bug that the rest of the world has come down with.

China's economy, largely directed from central planning as opposed to private enterprise, continues to develop. And Ordos is at the front of the pack of the large number of cities pushing forward.

Better Off?

I haven't had a whole lot of time for blogging recently. I have had time to read plenty though.

I'm reading for about an hour every day on my lunch break and it is great. I'm really happy to be getting into books as opposed to focusing on news features on the web, what I've been more into the past couple years. I do have internet access at my work and could theoretically surf the web and/or blog during my free time, but I would prefer to get away from the desk where I spend my days. Going outside everyday with a book (no, I don't use an iPad or Kindle to read books) is something I'm really enjoying this spring.

The last book I finished was James Fallows' Postcards From Tomorrow Square that I referenced in my last blog post.

Fallows is a very humble yet keen observer. His perspective, as someone who came to China with a fairly blank slate (ie. not a "China hand"), has been refreshing. One passage in the book was particularly striking to me. It is a notion that I've thought about before that Fallows lays out very well.

From pages 92 - 93 from Fallows' book:

Has the factory boom been good for China? Of course it has. Yes, it creates environmental pressures that, if not controlled, could pollute China and the world out of existence. The national government's current Five-Year Plan - the 11th, running through 2010 - has as its central theme China's development as a "harmonious society," of hexie shehui, a phrase heard about as often from China's leadership as "global war on terror" has been heard from America's. In China, the phrase is code for attempting to deal with income inequalities, especially, the hardships of farmers and millions of migrant laborers. But it is also code for at least talking about protecting the environment.

And, yes, throughout China's boom many people have been mistreated, oppressed, sometimes worked to death in factories. Even those not abused may be lonely and lost, with damaging effects on the country's social fabric. But this was also the story of Britain and America when they built their great industries, their grand turbulent industrial cities, and ultimately their great industrial middle classes. For China, it is far from the worst social disruption the country has endured in the last 50 years. At least this upheaval, unlike the disastrous Great Leap Forward of the 1950s and Cultural Revolution of the 1960s and early 1970s, has some benefits for individuals and the nation.

Some Westerners feel that even today's "normal" Chinese working conditions amount to slave labor - perhaps $225 a month, no life outside the factory, work shifts so long there's barely time to do more than try to sleep in a jam-packed dormitory. Here is an uncomfortable truth I'm waiting for some Chinese official to point out: The woman from the hinterland working in Shenzhen is arguably better off economically than an American in Chicago living on minimum wage. She can save most of what she makes and feel she is on the way up; the American can't and doesn't. Over the next two years, the minimum wage in the United States is expected to rise to $7.25 an hour. Assuming a 40-hour work week, that's just under $1,200 per month, or about 5 times the Chinese factory wage. But that's before payroll deductions and the cost of food and housing, which are free or subsidized in China's factory towns.

This is a very slippery slope. In no way do I romanticize what migrant workers in China go through on a daily basis. While I never saw factory life too much while in China, I was exposed to the lives of plenty of construction workers, restaurant workers, and day laborers while living in Xi'an. Their lives are utterly grueling.

Saying that, a person making minimum-wage in the US also has it rough. Fallows wrote this piece a few years ago and you can tell it's dated by a couple of the expressions he used. Although it is not totally up-to-date to 2010, what he wrote still applies. In fact, I think it's probably even more accurate now.

China has a plethora of domestic issues. It doesn't do me any good to try to list them out. Everyone reading this has seen them all before. But what is going on in China, and what has gone on for the past couple decades, has undeniably brought up millions of people.

And given the state of the US economy and how difficult it is to find work, standards between the two countries' citizens is at least worth discussing. The unemployment rate of young black men in the US is 34.5%. Generation Y's unemployment rate as a whole is 18.5%. Retirement isn't a reality for the millions upon millions of baby boomers entering their 60s. The American Dream® for many is fading or has been completely lost.

Qian and I are lucky. We have enough work to live a comfortable life. But there are scores of very qualified people right now who can't make ends meet. People who are less qualified? Well, they simply have no options.

Although this post is something of a screed against the US, I know that there are things that still make the US great (which I still think it is). One of the most important things that America still has on China is a society that is governed by rule of law. The book I'm currently reading, Wild Grass by Ian Johnson, focuses on the darker aspects of China's rise, particularly its lawlessness. There are significant drawbacks to China's method of development. I'll surely quote a passage from that book sometime here in the coming days.

Currency Affairs

I was delighted to hear a discussion on the radio today of an issue I tried explaining to a colleague recently: why China, a developing country, has so much money and currency reserves. I got pretty fumbled up trying to explain it. Such monetary and economic concepts can be difficult for me to thoroughly understand.

Here's the "Planet Money" report from NPR's Morning Edition that touched on the basics of US/China monetary policy this morning:

The United States government is also thinking about its financial relationship with China. Lawmakers from both sides of the aisle are calling for Treasury secretary Timothy Geithner to declare that China is manipulating its currency. Geithner will deliver a report to Congress about two weeks from now.

In the meantime, lawmakers like Ohio Democrat Tim Ryan are saying things like Chinese currency distortion is putting a lot of Americans out of work. And if you're wondering what a decision by the Central Bank of China has to do with workers in Ohio, we have an explanation from Alex Blumberg of our Planet Money team.

ALEX BLUMBERG: To understand why American lawmakers are so upset about Chinese currency policy, it helps to follow the money. So let's start with someone pretty typical - an American businessman who gets stuff made in Chinese factories.

Listen to the Report or Read the Rest of the Report

The rest of this story is a discussion of how and why Chinese factory owners turn the US dollars they earn into Chinese RMB. This part of China's "high savings rate" isn't discussed too often.

I read a very thorough overview of this same process a couple days ago in James Fallows' book - Postcards From Tomorrow Square: Reports From China. The chapter - The $1.4 Trillion Question - has a very detailed explanation of how dollars wired to factory owners in China end up being converted to dollars and, often, treasury bills. Very well-presented information. The book is a collection of Fallows' Atlantic Monthly China articles over the past few years. I'm enjoying it a lot.

Another one of the chapters in the book also dealing with economics and finance - China Makes, the World Takes - has an insightful take on the US' view towards China and the "currency manipulation" that was discussed in the NPR article above.

From pages 104 and 105 of the book:

American complaints about the RMB, about subsidies, and about other Chinese practices have this in common: They assume that the solution to long-term tensions in the trading relationship lies in changes on China's side. I think that assumption is naive. If the United States is unhappy with the effects of its interaction with China, that's America's problem, not China's. To imagine that the United States can stop China from pursuing its own economic ambitions through nagging, threats, or enticement is to fool ourselves. If a country does not like the terms of its business dealings with the world, it needs to change its own policies, not expect the world to change. China has done just that, to its own benefit - and, up until now, to America's.

Fallows is right on in this passage.

China is a sovereign nation. I don't understand why US politicians feel as though their opinion has any sway on Chinese currency policy. It shouldn't and, it appears, doesn't matter what the US says. Even if the rest of the world and China would benefit from a shift in policy, it's only the Chinese government's decision to revalue its currency. It's not as if the US thinks about other countries before it acts.

I understand that US politicians huffing and puffing about China are may very well just be politicking. But even if they know that their words aren't going to affect China and are simply dissing China's "manipulation" for votes, I still don't like it. Such China-bashing is allowing Americans to feel as though we don't have to change and that our problems are being caused by others. That is just not true.

Whether I approve of what US politicians are or aren't saying, there's no doubt that the US/China political rhetoric on this topic is important. And speaking of the US/China relationship, just preceding this discussion on NPR this morning was an interview with Zachary Karabell, the author of Superfusion who I interviewed this past fall. I felt pretty cool having interviewed the same guy who was being interviewed on Morning Edition! (I am still grateful that Karabell gave me the time to have such an in depth interview with him a few months ago).