The Macroeconomics of Chinese kleptocracy
There are a lot of things I don't understand about China's economy, and every time I think I might have a handle on it, I come across juicy tidbits like these ones:<p>* The ghost city of Ordos.  Built <i>on spec</i> for one million residents, this city sits empty in the middle of nowhere. A lot of money went into building all its plazas, museums, parks, office buildings, and residences, but no one needs or uses any of it.[1]<p>* The New South China Mall, in Guangdong Province.  With nearly 10 million square feet of retail space, it's <i>by far</i> the world's largest mall.  Opened in 2005, almost no one ever visits it, and only around 1% of the retail space has been leased -- it just sits empty.  A lot of money went into building it, but no one needs or uses it.[2]<p>* A well-known hedge fund manager recently reported that China is building "2.8 billion square metres of Class A office space over the following couple of years...  That’s basically a five-foot by five-foot office cubicle for every man, woman and child in China.” A lot of money is going into building <i>a new cubicle for everyone</i>, but what's the economic rationale?[3]<p>[1] Here's a recent BBC article on it: <a href="http://www.bbc.co.uk/news/magazine-17390729" rel="nofollow">http://www.bbc.co.uk/news/magazine-17390729</a> and a great photo essay in Time: <a href="http://www.time.com/time/photogallery/0,29307,1975397,00.html" rel="nofollow">http://www.time.com/time/photogallery/0,29307,1975397,00.htm...</a><p>[2] Here's a recent video of the mall on a Saturday: <a href="http://www.youtube.com/watch?v=Eel1r1nm1lU" rel="nofollow">http://www.youtube.com/watch?v=Eel1r1nm1lU</a> and here's an article about it: <a href="http://www.dailymail.co.uk/news/article-1223747/Ghost-mall-The-worlds-largest-loneliest-shopping-centre.html" rel="nofollow">http://www.dailymail.co.uk/news/article-1223747/Ghost-mall-T...</a><p>[3] For example, see <a href="http://www.theglobeandmail.com/report-on-business/rob-magazine/chanos-calls-china-syndrome/article596067/?page=all" rel="nofollow">http://www.theglobeandmail.com/report-on-business/rob-magazi...</a>