CHINA’S GHOST-CITY ECONOMY

Warning! Way too long Post. I’m truly sorry.
From what I’ve read via bits and pieces and hints of A.C.T.’s past activities, I’m actually blown away that he’s not stepped foot in Mainland China. That A.C.T. human seems to have been nearly everywhere and seen and done things I’ll proabably never do and see. (Thanks, A.C.T. !) I’ve often thought he was seal team or CIA or a black ops agent. Maybe he is. Or was. That leaves you and me, “Ron”, with our mainland experiences to share. You’ve shared yours. It’d be hard for me to condense my experiences over there into a normal sized post. I first stepped foot in Mainland China the year Hong Kong International opened, 1998. December 2019 was, I think, my 60th trip to Asia. Each time it would usually involve Taiwan, then Hong Kong, Mainland and out. Each time, about 12 to 14 days per trip.
And to be clear, my experiences in Mainland China centered mainly in Guangdong Province, nearest to Hong Kong and arguably for decades the manufacturing hub for China. I did many trips “up North” to Shanghai/Hangzhou/Ningbo area, mostly for bearing manufacturing. Guangdong Province has cities like the old ‘Canton’ – now Guangzhou, and Dongguan City, and Shenzhen. It’s probably the richest, most urbanized province and has seen growth that has been astonishing. Ok, Bona Fides done.
I’d been working there so long I’d say it’s been in 3 phases. The early years were just as Bill described, abandoned projects, insanely shoddy workmanship in construction of roads, bridges and buildings. Proof? Here’s two stories.
I’m heading to my hotel, one of the early residential properties with a golf course, single family homes and a hotel I can only describe as the Chinese version of Hitchcock’s The Bates Motel. Attached to the hotel is a small mall and a couple of restauants. From the parking lot you enter the complex down a long wide and very formal covered hallway. One morning, I walk out to my ride, and note that the stucco ceiling along the length of the hallway has collapsed on to the red carpet of the concrete walkway. Wow, I thought, had someone been walking below that, they’d have been killed. So I go the one of the factories for some meetings , and that evening, heading back to my hotel after dinner, I walked down that same hallway. The entire ceiling was re stucco’d, but then right after they did the final trowling…..they PAINTED IT! No surpise to me, 2 days later, the entire thing collapsed again. My local co worker had said they’d been battling with that ceiling for weeks now. But they kept doing the same thing over and over, hoping this time to get it right. Nope.
The other horror story nearly killed me. In the early years, concrete freeways were being built all across the countryside. Pretty. Beautiful shrubbery in the medians, all looked like flowing hibuscus. Shiny new streetlamps, where in the states, you might get a streetlamp near freeway offramps. In China, it was a streetlamp every 100 meters. At sundown, night turned to the brightest of days, every night. Nice details, you early Chinese Civil Engineers! However…..no one knew about the importance of the construction and setting of a road bed to pour the concrete on, and in most cases, that all important steel rebar was missing too!
I’m travelling down one of these freeways one summer day in the bright sunlight, and my driver sees a tiny caution tape strung from one cone to another, 30 feet in front of a hole in the freeway, A hole 10 feet wide (the entire lane) and hundreds of feet long. 1 caution tape, just in front of the hole. No flagpersons, nothing! Local knowledge from my driver helped me escape not one, but 3 of these death traps on my 2 hour journey from Zhaoqing to Guangzhou.
The middle years, lots of construction, but this time it’s a mix of local owned companies building projects (failing and flailing), and European – German-Dutch and French engineering companies designing and supervising the building roadways, infrastructure in places like Shenzen and Dongguan. Anything done by outside services seemed to work, get done on time and stayed together. What once were individual cities with an hour of rural land in between, the border with Hong Kong was built into a true megalopolis. With all this construction going on, which would take a decade in the states, was condensed into 3 years in Dongguan. Sammy Haagar was right but he had the wrong city in his song “I can’t drive 55!” One trip It took me nearly 15 hours to get through Dongguan. Ungodly gridlock. Next time you see a flagman or flagwoman in the states, smile and wave.
Even then, the middle years had their problems. My associate factory, I won’t name names, when they were building out their new complex on really really affordable land adjacent to the West River…….Well, they learned the valuable lesson of the need to sink pilings and concrete and steel in the bedrock, and not just pouring concrete factory floors (they did use rebar, tho) on the dirt next to the river. Yup, 30,000 sq feet of factory floor per building, times 6 buildings, dropped 3′ in 1 year. Like I said, won’t name names.
Now, in phase 3 or the last decade, the rich industrial province of Guangdong exploded with massive growth again, but this time it’s apartments and business skycrapers. Over the years, I never ever got tired of sitting on the Kowloon peninsula waterfront and at night just staring at the magnificent skyline of Hong Kong Island. 20 years of watching it shine, sparkle, glimmer across the harbor. Now? Hong Kong looks like the ugly stepchild to Hypergleaming neighbor Shenzhen city. The High speed trains run on time, the subways run on time, and there is a train usually every 15 minutes. Each train can be 15 cars long and hold a hundred people each car. When you have over a billion people to move, you learn how to do it. But it took the Europeans to come in and do the trains first, for the locals to then copy exactly every step.
In the City I worked in the most, Zhaoqing (beautiful city west of Guangzhou) I jokingly call it the Chinese version of “Lake Tahoe Meets Las Vegas”. Housing is going OFF, but occupancy is high Really high. Put a lot of housing in an area that’s relatively beautiful (google it) and people come, first as tourists from neighboring cities and outside Guangdong province, then they want to move there for the occasional blue sky, and relatively fresh air, the beautiful and almost clean natural lake, and the pretty darned high mountains within a 15 min drive from city outskirts.
Now to Ghost Cities. Here is where Bill and his information source are undoubtedly correct. Sure, urban renewall worked out allright in Shanghai, for there is good work there and a massive population base, and it’s a pretty ok place weather wise. (well, ok except for all the covid lockdowns, but I digress) But in the other provinces where you wouldn’t want to visit let alone LIVE there, and the laborers earnings are a pittance, then you’re going to get the ponzi scheme Bill describes. And it IS a ponzi scheme. And honestly, it Sucks to do that to people who’ve made a little nestegg and want to invest.
I don’t know if their culture was hooked on shows like “flip this house” or “Property Brothers”….but someone sold the idea to the regular workers, and the factory middle managers and trained engineers in China that real estate investment was blue chip, it would always go up and never ever end, like a broken ATM. I know it wasn’t ME who said that’s a wise investment. And, it wasn’t one of the factory owners I work with, he does the opposite. He brings his workers into a meeting room and gives them saving strategies and how to carefully take care of the money they earn. I’m proud of him for doing that. He doesn’t have to do that. He really cares for his staff of over 800 people.

I’ve got at least 3 or 4 novels of my China experiences inside my head. Of course, the only folks remotely interested are my wife and 3 daughters. And even that’s a stretch… I’ll close this waaay TLDR post by saying that Bill’s right…and Bill’s wrong. The only real way to understand what’s going on over there in China is to go over there to China and experience it. There are some really nice people over they’re just trying to get by, being hampered by a governing thugocracy working very very hard to exert “control” over a billion people, and keep the status quo of enriching themselves.
As Bill once said in his afterburner called Game Theory, when describing the strategy of Tit-for-Tat…..”it’s a vicious cycle and one that is very difficult to get out of”. China is in that cycle, it’s not good for the ‘regular’ folk, and it doesn’t seem that it’s going to change or end very soon.