Will China have its own real estate bubble? And what would that mean for the world economy?
Here's a very interesting news report from Al Jazeera (via TC Streets for People) that chronicles the building boom in China, which includes a $585 billion government stimulus package critics say is designed to inflate the country's GDP growth.
Ordos, Mongolia, an empty new city in "China's Texas," is the focus of the story. The government has built the city from scratch — 30 km away from the current Ordos — but so far, the city is largely vacant except for construction workers.
Gleaming new houses and apartments have absentee owners, and what economy there exists is based building and real estate speculation by China's new rich. As one commenter puts it, no one in China has ever lost money in real estate, and so that's where much of the nation's cash is going.
While Ordos is neither Brasillia nor Dubai, it has some features of both, with central planning and capitalist ostentation in harness, pulling it into the future.
The Ordos 100 Villas project is an example. Architects from around the world have been invited to design villas for the new city. As in this example, the designs are showy and magnificently isolated from any context or real Chinese city life.
During my trip to China several years ago, I saw new cities designed to replace those drowned by the Seven Gorges dam, as well as new city centers built next to the old and polluted cities. The contrasts were striking, as if the places had simply skipped centuries.
But the streets were not empty, and the sky was not the pristine blue of the architects' and speculators' dreams.