[StarSlayer]

Interesting documentary on China's Ghost Cities.  I remember figuring out how to make a Big Mac in a command economy was an easy way to highlight the inefficiencies but the fact that China is pretty much mass producing Detroits is a pretty stark macro example.

[An4ximandros]

That's... unsettling.

[General Battuta]

Interesting documentary on China's Ghost Cities.  I remember figuring out how to make a Big Mac in a command economy was an easy way to highlight the inefficiencies but the fact that China is pretty much mass producing Detroits is a pretty stark macro example.

Just wait until that army of Detroits produces an army of everything that comes from Detroit! Arsons! Sarif Industries! Kurtwood Smith gangsters!

[StarSlayer]

I'd Buy That For A Dollar!

[Bobboau]

I don't get this, they have people living in old crumbling apartment buildings and nice new modern housing units go unused. they are communist so what are they not giving those things over to their people? I see no benefit for them to leaving them unused.

[Black Wolf]

A couple of reasons. First, it's because despite what they tell you, China is only vaguely communist. They're a command economy, yes, but in a day to day sense for the people, it's nearly indistinguishable from capitalism in a normal country, except in the degree of control that the government has.

Secondly, it's because China is economically much more tied in with the rest of the world than, for example, the USSR was back in the cold war. The Chinese built all these ghost towns as a way of keeping GDP growth going in the buildup to and the aftermath of the GFC. In doing so, they ran up huge debts, and their debt levels are growing considerably faster than their GDP or tax revenues. As such, they really can't afford to just give them away - if they're not paid for, then the debt will have to be shouldered by the governments with no asset to back it. Equally, they can't afford to just put people in them and let them pay it off slowly as, short of charging realistic interest on them (which would probably mean that the repayments would still be beyond most Chinese), inflation and debt interest would eat up the repayments and leave the government only marginally better off than if they gave them away.

The Chinese have a lot of economic issues to work through in the next few years - debt, a housing construction bubble and the revaluation of the renminbi, which the rest of the world will eventually have to force on them (or keep suffering through a seriously non-level playing field in international trade), one way or another. It's not going to be easy for them, and I just hope to hell they know what they're doing when it comes to navigate them, or it's going to be bad for the entire planet.

[General Battuta]

Couldn't have said it better myself. When China finally gives up its currency controls we're all going to be in for interesting times, in the Chinese sense.

[MP-Ryan]

they are communist

Black Wolf alluded to this, but China is communist in name only.  Their political system bears as much resemblance to Communism (as described by Marx/Engels and later Marxists) as the British system does to a monarchy - extremely little.  There are still a few trappings of the name laying around (e.g. Communist Party), but China is far from a truly socialist country.  The Scandinavian countries have far more hallmarks of socialism/collectivism than does China.

China's system is basically capitalism without the associated democracy; it's a collection of business ventures overseen by a central governance structure that is primarily concerned with economics.  Frankly, China should be a true capitalists's wet dream... except, of course, it highlights how unbridled capitalism without proper regulatory structure breeds corruption and nightmarish social conditions based on class.

[Dragon]

Yeah. In fact, China has a lot more in common with a megacorporation than a country. Indeed, a "collection of business ventures overseen by a central management structure" is pretty much how a concern is defined in business language. They call themselves communist, but are far from it, being a rather extreme example of capitalism. They are a dictatorship, which is perhaps the biggest thing they have in common with most actual communist countries. You can have a communist democracy or a capitalist dictatorship, though, they're just not very common.

[Bobboau]

I mostly meant the communist thing in that they cannot openly fallback on the arguments a capitalist government might make.
but I still don't see how leaving them vacant puts them in a better position than giving them away or charging installments, maybe they would not be in a much better position, but I don't see how it would be worse, other than the capitalist argument that it would lower demand and thus value of the properties.

[Dragon]

Really, they don't even pretend they're communists. They're just calling themselves that for some reason, but I don't think they really care about that label anymore. The Chinese government acts a lot like corporate management now. Even if there's any ideology besides "More profits!!!", it's probably confined to their department of propaganda.
And it wouldn't really lower the value of those properties. If there are no people who actually can live in those apartments, then their real value is zero. Still, that's not what matters in this game. BW posted about that in detail.

In general, the world is in a rather sticky situation now. I'm not exactly fond of Chinese, but if their economy takes a hit, the entire world will feel it. With aftereffects of GEC still present, an economic crisis in China could be incredibly devastating.

[666maslo666]

]Frankly, China should be a true capitalists's wet dream... except, of course, it highlights how unbridled capitalism without proper regulatory structure breeds corruption and nightmarish social conditions based on class.

Yet as far as economy is concerned China is still one of the fastest consistently growing major economies and certainly among the better managed developing countries. Even poverty rate decreased a lot in last decade or so. So if China is a true capitalists wet dream (debatable), then it is also a proof that such capitalism works well.

[karajorma]

I live in China. Trust me it's really not.

[StarSlayer]

]Frankly, China should be a true capitalists's wet dream... except, of course, it highlights how unbridled capitalism without proper regulatory structure breeds corruption and nightmarish social conditions based on class.

Yet as far as economy is concerned China is still one of the fastest consistently growing major economies and certainly among the better managed developing countries. Even poverty rate decreased a lot in last decade or so. So if China is a true capitalists wet dream (debatable), then it is also a proof that such capitalism works well.

Um, I dunno if you neglected to watch the video but one of the major points was that China was mass producing uninhabited cities to artificially inflate their GDP.  That doesn't really speak to responsible economic growth.

[MP-Ryan]

I live in China. Trust me it's really not.

Put much more succinctly than I would have, but yeah, that's pretty much it.

China has made large economic strides, but they haven't benefited the country as a whole.  In true capitalist fashion, trickle-down economics don't actually work, and China has created a large underclass with a small percentage of very wealthy, politically-connected among the upper class running the show.  The country is rife with corruption, pollution, and human rights abuses - in other words, it's a technologically-advanced late-19th century Britain without even the slightest trappings of democratic rule.

[666maslo666]

China has made large economic strides, but they haven't benefited the country as a whole.  In true capitalist fashion, trickle-down economics don't actually work, and China has created a large underclass with a small percentage of very wealthy, politically-connected among the upper class running the show. 

What about this:

https://en.wikipedia.org/wiki/Poverty_in_China#Poverty_reduction

China’s sustained growth fueled historically unprecedented poverty reduction. The World Bank uses a poverty line based on household real consumption (including consumption of own-produced crops and other goods), set at $1 per day measured at Purchasing Power Parity. In most low-income countries this amount is sufficient to guarantee each person about 1000 calories of nutrition per day, plus other basic necessities. In 2007, this line corresponds to about 2,836 RMB per year. Based on household surveys, the poverty rate in China in 1981 was 63% of the population. This rate declined to 10% in 2004, indicating that about 500 million people have climbed out of poverty during this period.

Based on the wiki article it did in fact benefit the common Chinese a lot.

Um, I dunno if you neglected to watch the video but one of the major points was that China was mass producing uninhabited cities to artificially inflate their GDP.  That doesn't really speak to responsible economic growth.

I dont dispute that GDP manipulation is a factor, but really, how important can it be? 1-2% of GDP growth? Even counting the ghost cities out, China will be at the top.

I live in China. Trust me it's really not.

Id be interested to hear more. But before you write, dont forget to compare China not to developed nations, but to other developing ones with similar starting conditions. I think in that comparison economically China will end up in a positive light.

[Scotty]

China has made large economic strides, but they haven't benefited the country as a whole.  In true capitalist fashion, trickle-down economics don't actually work, and China has created a large underclass with a small percentage of very wealthy, politically-connected among the upper class running the show. 

What about this:

https://en.wikipedia.org/wiki/Poverty_in_China#Poverty_reduction

China’s sustained growth fueled historically unprecedented poverty reduction. The World Bank uses a poverty line based on household real consumption (including consumption of own-produced crops and other goods), set at $1 per day measured at Purchasing Power Parity. In most low-income countries this amount is sufficient to guarantee each person about 1000 calories of nutrition per day, plus other basic necessities. In 2007, this line corresponds to about 2,836 RMB per year. Based on household surveys, the poverty rate in China in 1981 was 63% of the population. This rate declined to 10% in 2004, indicating that about 500 million people have climbed out of poverty during this period.

You're arguing against people with personal experience either actually living in China or who study this kind of economics for a living with Wikipedia.

Particular Wikipedia which defines "Poverty" as less than $365 dollars a year.  I make that in two weeks, and it's still difficult for me to pay for basic necessities here in the US.  In real terms, the poverty line in any developed country (even China) is significantly higher than that.

[The E]

Id be interested to hear more. But before you write, dont forget to compare China not to developed nations, but to other developing ones with similar starting conditions. I think in that comparison economically China will end up in a positive light.

Invalid base for comparison. China wants to be treated as a first-world nation. So let's evaluate them against other first world nations.

[MP-Ryan]

What about this:

https://en.wikipedia.org/wiki/Poverty_in_China#Poverty_reduction

China’s sustained growth fueled historically unprecedented poverty reduction. The World Bank uses a poverty line based on household real consumption (including consumption of own-produced crops and other goods), set at $1 per day measured at Purchasing Power Parity. In most low-income countries this amount is sufficient to guarantee each person about 1000 calories of nutrition per day, plus other basic necessities. In 2007, this line corresponds to about 2,836 RMB per year. Based on household surveys, the poverty rate in China in 1981 was 63% of the population. This rate declined to 10% in 2004, indicating that about 500 million people have climbed out of poverty during this period.

Based on the wiki article it did in fact benefit the common Chinese a lot.

Based on the definitions used, it really did not.  I question the 500 million figure since it doesn't appear adjusted for population growth, but even using percentages, it means that ~50% has gone from income levels below minimum subsistence to income levels above minimum subsistence.  Nowhere does it measures how much.

Moreover, it also doesn't comment on the substantial changes that has brought with it.  Since 1981, China has expanded industrial activity, power generation, and manufacturing on a massive scale but without massive emissions improvement.  China has a massive pollution problem that affects overall health, and much of the profit associated with those developments in consolidated in the hands of a small few, primarily in large centers.

By and large, the social and economic conditions in China today are very similar to turn-of-the-century Britain (or slightly earlier).  They're a bit of a grand experiment demonstrating how brutal unregulated capitalism truly is.  Hopefully they deal with it before they irreparably damage their landscape and water, not to mention citizenry.

[666maslo666]

You're arguing against people with personal experience either actually living in China or who study this kind of economics for a living with Wikipedia.

First of all, I am arguing in support of a widely held view, even among all the relevant economists who study this stuff, that Chinese economy is growing rapidly and can be considered a successfull one, compared to similar developing nations, and that the living standards of even the common Chinese did increase quite a bit. So they must be doing something right. Now if someone disagrees with that, then I expect some good arguments to convince me otherwise, and I am afraid "I live there" wont cut it.

Particular Wikipedia which defines "Poverty" as less than $365 dollars a year.  I make that in two weeks, and it's still difficult for me to pay for basic necessities here in the US.  In real terms, the poverty line in any developed country (even China) is significantly higher than that.

Poverty measured as $1.25 dollar at purchasing power parity per day is a standard measure used all the time. Id be careful to draw any comparisons with the US since they are very different countries and prices are different too. Also, this probably measures real poverty, not the first world "I have a house and a car and a playstation and internet but I am poor" poverty, so yeah it is low by our standards, barely enough to survive.

Anyway, if you want a little more holistic measure, here is Chinese HDI:

http://countryeconomy.com/hdi/china

Moreover, it also doesn't comment on the substantial changes that has brought with it.  Since 1981, China has expanded industrial activity, power generation, and manufacturing on a massive scale but without massive emissions improvement.  China has a massive pollution problem that affects overall health, and much of the profit associated with those developments in consolidated in the hands of a small few, primarily in large centers.

By and large, the social and economic conditions in China today are very similar to turn-of-the-century Britain (or slightly earlier).  They're a bit of a grand experiment demonstrating how brutal unregulated capitalism truly is.  Hopefully they deal with it before they irreparably damage their landscape and water, not to mention citizenry.

Yeah, I am not saying China is without issues. What I am saying is that it is economically quite successfull compared to other developing nations and therefore one should be very careful with any criticism or hasty dismissal of their system (whatever that is). Because it works.