Most of the news we hear about China runs along the lines of how they are either out educating us, out manufacturing us, or simply owning us via the massive debt financed by chinese purchase of our treasury notes. We here about how the price of everything is going up because Chinese demand for raw materials, like concrete, is driving price increases. What we don’t hear about is what this surging economy in China is actually doing. An Australian news site has put a twelve minute investigative report on Chinese ghost towns.
The visuals are familiar to us here. Empty storefronts, vacant buildings, but just on a massive scale. Luxury condominiums stay vacant while affordable housing, often nothing more than communal rooms linked by plumbing, ring the new construction. China is presenting a starker vision of the divide between the need, better affordable housing and higher paying jobs– and the finance market driven investment, luxury housing and shopping.
The interesting thing is that this contrast is really an exercise in financial darwinism. In the end, the infrastructure of roads and buildings will be used. But first investors will lose billions, and many low skilled Chinese workers will lose livelihoods and homes because the job market they currently struggle in is being replaced. Fifty years from now, no one will be worrying about empty luxury condos that sit empty, and sociologists will mark a footnote on the enigma of what happened to all the agrarian based economy.