Google’s Satellite Images Reveal Chinese ‘Ghost Cities’ (Over 64 Million New Vacant Apartments)

Scallywag and Vagabond ^ | 12/21/2010

[SeekAndFind]

Satellite images pulled from Google Maps showing empty Chinese ‘ghost-cities’ surfaced and went viral yesterday, capping months of allegations that there are allegedly over 64 million brand new vacant apartments in China, enough to house over 200 million people.

The almost post-apocalyptic images of excess property are said to be the result of Chinese government pressure to increase internal economic activity – and hence net GDP – by any possible means, even building entire cities even when it’s unnecessary.

Patrick Chovanec of Tsinghua University explained to English language Al-Jazeera TV: ‘Who wants to be the mayor who reports that he didn’t get 8% GDP growth this year? Nobody wants to come forward with that. So the incentives in the system are to build. And if that’s the easiest way to achieve that growth, then you build.’ What makes this apparently pointless expansion so appealing is that, as Chovanec also states: “Nobody’s ever really lost money on real estate in China.”

So, as Business Insider reported back in September, because “ [the Chinese] need to put their money somewhere, but the stock market is under pressure and bank interest doesn’t cover inflation…they plunk their money into a new property, just as a place to store their wealth, even if they don’t intend to live in the place and can’t find renters.” One interviewee in an Al Jazeera report attests to this as fact, stating that though he wants to move into Ordos, one of the cities in question, the cost would be so high that despite nearly the entire city being vacant he’s unable to afford it.

The result of this unnecessary expansion is that we have perhaps the first outposts of civilization that are impractical to the point of being unusable, as many of them have housing prices so high that even if there were people available to fill them, it would be impossible to do so – the money simply isn’t there, and ideally never will be. Otherwise the investments of an entire country’s wealthy would be utterly devalued (unless China someday controls so much of the world’s wealth the cost of living in these cities becomes affordable only for them).

At least for the time being this makes the issue into a much more abstract one. It begets a situation in which the particular housing market of these cities becomes less about want, need, or exchange value and more about investment banking. That is to say: these aren’t cities we’re looking at, but bank vaults wherein the houses have become abstract capital’s physical manifestation – as has been hinted, an apparition.

Which is, I suggest, a sign that in these images the physical commodities that structure civilization itself have become so imbricated with capital that they have become it outright: More precisely by looking at these cities we witness the absolute limit of both capitalism and civilization. Herein the physical (buildings, cities) and immaterial (capital), the objective and the abstract, reality and representation, have completely united, become indistinguishable – exactly as happens in the case of insanity.

[dangus]

To put into context, China’s population will not grow 200 million. By 2050, it will be shrinking by 12 million per year, the size of New England. This is not prognostication; this is fact: the babies quit being born, and now we’re just biding time for the babies which were born in the 70s start dying.

[dangus]

>> The average Chinaman is scared of these places. they think they are haunted. <<

Just curious: What would be haunting them? Are ghosts of long-dead Mayans emigrating to China?

[rhombus]

Bill Gates will buy it. American employees can then be relocated to work abroad for half the pay, "all bills paid". < 1/2 sarcasm >

Why bother relocating spoiled Americans? ;-)

[SeekAndFind]

RE: Bill Gates will buy it

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Of course, you know that Gates is no longer active with Microsoft. He’s into philanthropy now. In fact, according to the Wall Street Journal, current CEO Steve Ballmer once said that once Gates leaves, “I’m not going to need him for anything. That’s the principle,” Ballmer said. “Use him, yes, need him, no.”

Maybe we can ask Steve Ballmer is he’s interested ...

[a fool in paradise]

He sold all his stock?

[piytar]

People really have to read their Orwell. This is easily explained, and not with the mush in the article.

In order for an elite to retain power, one thing they must guard against is too much knowledge and prosperity in the people they rule. Building these cities is simply a way to expend resource without increasing the standard of living for the general populace. These cities serve the purpose of perpetual war in Orwell’s 1984 - to destroy the product of “the machine” which could otherwise destabilize the system and thus the ruling class’s power...

[piytar]

There are two key differences: When it became the property wouldn’t be sold, building stopped. Not so in China. The why is the second difference: The empty streets etc. were market driven, albeit mistakenly. These cities are politically drivEn. See my comment above.

[SeekAndFind]

RE: He sold all his stock?

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No, Gates still owns a majority of Microsoft’s shares ( I believe a little less than 10% ). But he is NOT involved in the day to day operations or even product development at Microsoft.

[mjp]

Another example of the insanity of Keynesianism:

The almost post-apocalyptic images of excess property are said to be the result of Chinese government pressure to increase internal economic activity – and hence net GDP – by any possible means, even building entire cities even when it’s unnecessary.

John Maynard Keynes advocated building pyramids as a cure for unemployment.
In fact, "Two pyramids, two masses for the dead, are twice as good as one," he wrote in his 1936 treatise.

[BenLurkin]

BUMP!

[BenLurkin]

Probably that AND a graffiti magnet.

[fieldmarshaldj]

Hehehehe...

[Windflier]

From the sounds of it they eventually went back to building. I know Frisco is considerably larger than it was when I was there.

I'm maybe 20 miles east of Frisco, and do business over there all the time. It's booming. Lots and lots of fully developed neighborhoods and shopping.

[fallujah-nuker]

Interesting post. "In Garet Garrett's A Bubble That Broke the World (pdf) written in 1932 he attributed the cause of the Great Depression to the building of figurative pyramids. His analogy is excellent, this story about the vacant cities reminded me of his example of investing half the worlds capital in shoe making:

To see it clearly, you may have to push it to the focus of extreme absurdity. Suppose, for example, that half of all the capital in the world were invested in shoe-making machinery. You have there the capacity to make in one day many more shoes than there are feet in the world, and yet the necessity to pay interest on half the capital in the world and charge it to the price of shoes will make shoes so dear that nobody can afford to buy them. The answer is that all the capital invested in excess shoemaking machinery is lost. Nearly half the capital in the world! Half less the relatively small amount that may be properly so invested. Exactly. It is really lost. The labor it represents is lost. All the wanted things that this labor might have produced in place of that excess of shoe-making machinery—they are lost, and forever lost. You cannot recover the labor by unbuilding the machinery any more than Pharaoh could have recovered his wasted Egyptian labor by unbuilding the pyramid.