Here's the latest. China has a fake deserted Disneyland-type amusement park. David Gray writes at Reuters:
Along the road to one of China’s most famous tourist landmarks – the Great Wall of China – sits what could potentially have been another such tourist destination, but now stands as an example of modern-day China and the problems facing it.Click here for pics of the deserted "Disneyland"
Situated on an area of around 100 acres, and 45 minutes drive from the center of Beijing, are the ruins of ‘Wonderland’. Construction stopped more than a decade ago, with developers promoting it as ‘the largest amusement park in Asia’. Funds were withdrawn due to disagreements over property prices with the local government and farmers. So what is left are the skeletal remains of a palace, a castle, and the steel beams of what could have been an indoor playground in the middle of a corn field.
Pulling off the expressway and into the car park, I expected to be stopped by the usual confrontational security guards. But there was absolutely no one to be seen. I walked through one of the few entrances not boarded up, and instantly started coughing. In front of me were large empty rooms and discarded furniture, all covered in a thick layer of dust, along with an eerie silence that gave the place a haunted feeling – an emotion not normally associated with a children’s playground...
All these structures of rusting steel and decaying cement, are another sad example of property development in China involving wasted money, wasted resources and the uprooting of farmers and their families...
The Chinese crash that is going to hit the stock market is going to be very loud. Not only are there empty apartments, children's amusement parks, but also train stations, airports and super trains.
You know it will hit the fan, though, when the rice bowls are empty.
ReplyDeleteEmpty rice bowls? Bullish! (for rice producers)
ReplyDeleteI didn't see anywhere that it was "government built". Is that just assumed? I can assume so since it was farmers land that this was forced upon, but I just wanted to confirm
ReplyDeleteAnonymous 2:33,
ReplyDeleteIs it the practice of capitalists and entrepreneurs to expend great investment to put land, labor and capital together just for the fun of it? Where would they get the money for such a venture, and why would the process have continued for so long without any returns? While it is not outside the bounds of possibility that capitalists and entrepreneurs make mistakes, what could cause such a "cluster of errors" where there is a prevalence of horrible real estate investments without mass bankruptcies?
A fantastically low rate of interest is a consideration, as well as credit expansion. However, I think that it is pretty evident that aimless projects such as that seen in China are more the result of subsidies and/or direct government funding. A free market simply could not sustain such mass errors of resource allocation, nor could the capital structure support it, without mass inflows of liquidity for investment? A free market simply would not be able to divert the resources for very long without the error being unmistakably evident.