China's Ghost Cities and Malls
sbs.com.au
sbs.com.au
The same cannot be said for the rest of the country. Many apartments are owned by companies anticipating renting the rooms to their workers. One of the buildings I was initially staying in was a dorm room sharing with other developers in my team. With wages so low it was difficult if not impossible for many of them to afford an apartment.
Many other apartments are owned by overseas Chinese, investing in their locality, awaiting their return.
I just returned from Shanghai and Sanya. There are a lot of dark apartments in Shanghai at night. I know a few Chinese who own multiple apartments, some more than 10, most of these are empty. There are limits to how much they can invest overseas, and I believe investment in real-estate is greatly increased by this.
I feel they have a real-estate bubble of incredible proportions. Everyone talks real-estate too much, and there are too many advertisements for new developments. I don't think this will end well.
One of my friends is a real estate agent. She told me recently that she and a friend had purchased a condo.
Me: Oh, so you're going to move in there soon?
Her: No, no.
Me: Oh, you're renting it out to tenants?
Her: No, no. If someone lives in it, then the value goes down. So we're going to keep it empty and then sell it next year or in a couple of years.
This cannot end well.
[1] I lived in China for years, but I learnt that here: http://yglesias.thinkprogress.org/2010/06/china-eyes-propert...
Geez investing is so cynical. :/
Insofar as they want to build apartment blocks and manufacture cars for Chinese consumers, the Chinese need steel. For that they need iron ore, and for iron ore Australia and Brazil are the main sources.
It's bad, but I think it seems worse than it is. Reason is that in East Asia buildings that have been lived in are considered "used" and therefore less valuable than a new one. So whereas in the West an investor would get himself a little pocket money by renting his building out, in the East they keep it empty to keep its value up.
As I drive into NYC and the skyline comes into view it humbles me as a Philadelphian. But then I think about those infographics—featured on HN, of course—showing how China is birthing a New York every twelve days or whatever the duration is, and I wonder: Will NYC cease to be relevant?
There is more than a little home-town pride at stake, and not the way you think: in the (nonexistent?) fight between NYC and the Valley, I am New York all the way. I deeply want New York to matter.
And so that colors my thinking, but, back to this article, I wonder: Building an city, or even building and filling a city with people, does little if it doesn't sort people and industries out in a way that makes them more efficient, more vital.
Again, I'm a Philadelphia. Everyone from West Philly says, "Oh, I love West Philly. The trees! The parks!" I love trees, I love nature, whatever that is. But I disagree with these people with their love affair with Philadelphia West of the Schuylkill River. I love people, people in quantities and densities that don't exist over there.
I don't discount the benefits of living in West Philly, or even a Chinese ghost city—all night parties without neighbors!—but you—we, society, humanity—lose something, or you don't gain something, when we put people in close proximity to each other in ways the lead to fruitful exchanges.
But in a sterile, planned city, that is initially empty... How do you get the ball rolling? How do you initially attract the people who can work anywhere in the world? The three cities I mentioned, and a few others, have solved that.
The reason people gathered at a certain buttonwood tree in lower manhattan was to trade shipping interests -- early finance was all about commercial shipping and the fact that NYC was an early leader in shipping led to the development of a finance hub and the two sides of the same coin propped each other up.
Here in England there is growing concern that Heathrow is stifling growth in London as it doesn't have capacity anymore and expanding it is politically infeasible. So it's not a far-fetched scenario...
I don't see NYC or any of the other regions mentioned—London, Tokyo, the Valley—becoming irrelevant anytime soon. I doubt any city is going to steal the title of "Capital of X" from any of them, though the industries that drive the success of these cities may wane—and wax and wane and wax and…—new cities (or existing cities) will rise to prominence due to the development of new industries and new ways of working.
One of the ironies that always struck me about the Valley was that much of it was built on the dream on making distance no longer matter. Instant, global, paperless, tele-blah, and on and on. Yet the Valley continued (and continues) to matter.
What we think of as technology really isn't technology any longer, in any meaningful sense. Pencils and paper are technology, yet CTOs don't control the stationary cabinet. I've asked, sarcastically, CTOs why they don't show more interest in the legal pads and ballpoint pens, to make a point: computers and phones are no longer perceived as technology but as things.
And as things, along with other newly-just-a-thing things like web apps and virtualized servers and storage and clusters, the history and dynamics that favor the Valley don't necessarily support the sort of innovations that are going to make a big difference.
That's why the New Yorker article on Nick Denton, who, according to the article, is trying to bring a television-like time model to web advertising—and is working to kill the impression model—is so interesting. It details a guy that's using technology—yawn, programmers—but has internalized and is working to forward the interests of a completely different culture.
Of course, the existing web advertising mindset is a product of the application of the paper publishing world's advertising models, which just goes to show that as time passes it's less about how any given technology technology wants us to think but how we make sense of that technology.
So maybe the sorts of things that come out of the Valley will change. There's an understatement. Of course they've already changed!
Place has a huge role in shaping what happens. Where you live affects the way you think about the world. The way you think about the world affects where you want to live. (See Slate's "The Big Sort" coverage.) Until a city has a distinct worldview, a Weltanschauung, that draws people and changes them—and the rest of the world—it doesn't really matter.
-Speculative buying (that's the cause of all the empty appartments in places no one wants to buy)
-Cultural reasons. When a guy wants to marry a girl, he has to own his own appartment. No when, no ifs, no but. If a girl were to marry a guy with no apartment her whole family would lose face. Because of the sex imbalance in China, there is a large "demand" of girls, and little "supply", so the "price" (quality, location and numbers of appartments) keeps rising. So this means parents of boys are constantly upping the ante, to get more and bigger appartments to try and ensure their son gets married. (my girlfriend is Chinese, so I am very aware of these issues...)
While the first reason would seem to indicate that the bubble would burst sooner rather than later, the second one seems to indicate that demand for appartment won't fall anytime soon.
You are assumed to be wealthy or at least a very good bet to eventually be wealthy.
As well, you can guarantee citizenship in a First World country. Have you encountered the term "filial piety" yet?
Some of my friends (guys no less) get paid to go to clubs in China just because the owner wants to associate it as a place white people go.
Have you thought about what would happen if china lowered the marriage age for women? 50 million+ new women in the marriage market. Problem delayed.
There's already age disparity in chinese marriages. The idea that millions of young men simply won't get married is absurd. They'll just wait longer, or expand the group of women they're willing to marry.
And I assume you're joking about chinese men marrying african women.
I don't necessarily mean marrying African women (tho' why not? historically colonists have always enthusiastically intermarried) but being out of China and working on labour-intensive projects like major infrastructure. Societies with lots of frustrated young men in them tend to go horribly wrong, Afghanistan is an example, in a society where there is a shortage of women anyway due to cultural reasons (e.g. healthcare), and successful men have 4 wives, and there is no social scene for teenagers and certainly no extramarital sex, what do the young men do? They run off into the mountains and it all goes a bit Lord of the Flies.
(from a year ago). About an hour long, but well worth it.
Edit: I meant to say, the focus of his talk is mainly details of the property bubble. Great information.