Traveling to Shenzhen about a decade ago, I was amazed to see literally hundreds of very tall cranes filling the horizon with building projects.
It was incredulous.
Was such unbridled construction tainted by ambitious government plans to house people in better earthquake-resistant living conditions?
Large scale government investments create enormous waste and abuse because they are not grounded in entrepreneurs who carry great risk on their backs.
Apparently China is a Black Swan catastrophe waiting to happen because builders and bankers don’t have adequate skin in the game.
I think this is what the author is talking about.
Chinas collapse will be boon to many other economies when they pick up the slack.
“Traveling to Shenzhen about a decade ago,”
I traveled throughout China 6 months ago on business. There were tall cranes filling the horizon with building projects. Nobody was working on the buildings. They had the concrete and steel up but other than that they were not finished and no work was being done. These were very large buildings, a standardized construction. I saw maybe 500 buildings.
It was surreal like a scifi armageddon landscape. I asked my host about them and only got that the government wants the rural people to move into the buildings. He had limited English so I didn’t push it.
The obvious financial loss was staggering.
China uses North Korean slaves and Chinese slaves to run their factories. Ghost cities for manufacturing never activated. There is a limit to slave labor productivity, apparently.
I think the method behind all the construction you saw was the same one driving China to export its goods at any cost, including lending money in any amount. The massive cohort of young, post-cultural revolution Chinese of job-age need to be employed, otherwise China becomes ungovernable. I believe the prospect of such a large number of Chinese in that class without a paycheck frightens Chinas leaders far more than any weapon our military possesses.