’China’s Manhattan’ Borrowed Heavily. The People Have Yet to Arrive

[M II A II R II K]

’China’s Manhattan’ Borrowed Heavily. The People Have Yet to Arrive


April 10, 2019

By Alexandra Stevenson and Cao Li

Read More: https://www.nytimes.com/2019/04/10/b...t-tianjin.html

.....

Welcome to Yujiapu Financial District, which promotes itself as China’s Manhattan, but may better be seen as a monument to the breakdown of the Chinese growth model. Four-fifths of the office space stands empty. Construction on other buildings has stopped, leaving skeletons in the sky. A sprawling mall has few shoppers. Inside, a pet store has no animals.

- China has long borrowed heavily to build and then counted on breakneck economic growth to pay it back. The script: Sell vast amounts of land to developers, borrow to subsidize construction, and jobs and new cities will result. It was a model that helped China build its skyscrapers and high-speed rail lines and ushered in an era of prosperity. — But China is not growing as fast as it used to, and it is not clear that the “build it and they will come” model will save Yujiapu and other places with big debts. The national government now must find other ways to spur growth without making the debt problem worse.

- “China’s economy has depended on building for the future, and there are considerable signs that they have overbuilt,” said Logan Wright, director of China research at Rhodium Group, a consulting firm, adding that debt and overcapacity could hold back growth. “That probably means much slower economic growth in the next decade compared to China’s recent path,” he said. — Tianjin, a coastal city just a short train ride from Beijing, had one of the highest growth rates in China. Its success made headlines, and local officials credited “Tianjin spirit, Tianjin speed and Tianjin benefits.” Then the economy slowed.

- If Yujiapu really is the Manhattan of China, it has a way to go to catch up to the real thing. Its avenues, some nearly as wide as Broadway, are eerily quiet. Many buildings just a few blocks from the Tianjin Juilliard School remain unfinished. The finished ones are mostly empty. — Many of the six-lane roads in the city lack crosswalk lights, in part because they are not needed. Across the Hai River from Yujiapu is another ghostlike district, Xiangluowan, where the local government encouraged private Chinese developers to build on their own dime. They did, but no one came. Dozens of the buildings in this district are now collateral for huge overdue loans that are being held by local banks.

- Despite the empty buildings, the local government keeps borrowing. Last year, Tianjin and entities related to the local government raised $36 billion through new loans, according to data from the People’s Bank of China, the country’s central bank. — Many residents believe Yujiapu’s problems have been overstated and try to cast its emptiness in a positive light. Mr. Zhang, who works for the online recruiter, said technology companies looking for alternatives to expensive places like Beijing and the southern city of Shenzhen could find Tianjin attractive.

.....

[bnk]

That doesn't look like Manhattan to me. Where's the garbage piles on the streets.

It needs more of this.



jk

[chris08876]

^^^^

Very true.

Also, no potholes with a cheap metal plate covering it that yields the "clank" "clank" "ting" "crshhh" "buugh"" sound as trucks or sedans hit them during the early morning rush hour.

[Obadno]

Originally Posted by M II A II R II K

’China’s Manhattan’ Borrowed Heavily. The People Have Yet to Arrive


April 10, 2019

By Alexandra Stevenson and Cao Li

Read More: https://www.nytimes.com/2019/04/10/b...t-tianjin.html

And this is why China will not have "its century" Dependent on Europe and the USA importing cheap goods, the price points in China are already being out-competed in Mexico, Central America and Southeast Asia. They spend enormousness government money hoping to jumpstart some sort of natural internal growth model which is why their GDP is at 6-13%. Spending a bunch of gov money building empty structures will pad your GDP for sure!

And FURTHERMORE they are dependent on Gulf Oil in a way the USA no longer is.

China is not in a good position. And the only reason China has been able to hold itself unified for the last several decades is economic growth. If that growth ends will the Tibetans, and the Manchurians and the southern costal cities and the far western fringe minorities. Are they all going to stick with Bejing when the prosperity hose dries up?

History would suggest no.

[CaliNative]

Originally Posted by M II A II R II K

’China’s Manhattan’ Borrowed Heavily. The People Have Yet to Arrive


April 10, 2019

By Alexandra Stevenson and Cao Li

Read More: https://www.nytimes.com/2019/04/10/b...t-tianjin.html

"Build it and they will come" may work for baseball fields but not for business centers. This is what happens when too much money is concentrated in the hands of a few, and they have no clue about how to spend it wisely. They build these Orwellian Potemkin business centers where nobody wants to live or work, or at least can't afford too. Classic bubble, now popping. I think Dubai was the model for this, not Manhattan, which grew organically and has a mix of old and new.

[Sun Belt]

I know China has a lot of people still living in rural settlements that'll probably continue to migrate to urban areas, but China is forecast to decline by a couple hundred million people this century. What happens when China can't fill these ghost cities?

[dc_denizen]

excess real estate investment - > returns too low in other sectors of the economy.

[ocman]

I wonder how much a tower costs in China. My guess is labor is so cheap they can quadruple the height beyond need without thinking much about budget.