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In 2012, I traveled for about 6 weeks in China. I saw a lot of large cities -- not the megalopolises of Beijing and Shanghai but Guangzhou, Xi'an, Kunming -- wi

In 2012, I traveled for about 6 weeks in China. I saw a lot of large cities -- not the megalopolises of Beijing and Shanghai but Guangzhou, Xi'an, Kunming -- with unreal amounts of what looked like high-end real estate going up. if you moved to the countryside, things got a lot poorer, so there was a pretty clear disconnect. But the weirder thing was endlessly empty malls. For whatever reason, high-end luxury malls had all been built _before_ the in-progress housing stock, and they had already found tenants who were stores way out of my (comparatively wealthy!) price range: gucci, prada, etc. So it seemed like the plan was to move a lot of people from the country to the city and provide them with high-end malls to shop at. But the problem was that those people were poor. It struck me as unlikely that they'd be rich enough to buy Fendi bags by the time they moved in. And the malls were standing dead empty until that happened. None of this made any sense, and it was happening on an absurdly huge scale. (I can't remember where I read this, but I like the line that went like: "There is no precedent for how big things are in China, because there's never been anything as big as China.") This seemed like a phenomenal misallocation of resources, so it was -- and is -- very hard to believe that a country making such crazy decisions was actually going to become wealthy and stable. So pretty much everything I read about China's economic development, I don't believe. It all seems like a house of cards. Articles like this one, however, are much easier to grok.

lazypenguin 8y ago
I found a similar reality in other developing countries. 1 hour outside of Dubai you can find giant luxury apartment blocks & chalet communities with 50% occupancy of basically only foreigners. A nearby deserted mall that is stock full of the top brands of everything and anything at top-dollar (literally) but just outside the "locals" live in abject poverty and work in the 50C sun. I have also seen in it Uzbekistan where a newly invigorated government rushes to throw up skyscrapers and luxury apartment complexes that nobody can afford while the local populations still lives in soul-crushing conditions. My theory is that many developing countries use the wrong metric to gauge their success, looking to count their skyscrapers or their advanced techno-cities but fail to see that the success of "developed" countries lies more in their justice and governance systems.
- est31 8y ago
  Indeed, probably the biggest advantage that our societies have to the rich elite of repressive countries is the justice and governance system. The problem with being rich in one of those oppresive regimes is that you can get rich. But staying rich is much harder, because the moment you fall out of favor you will be disowned. This can change simply through a new clan taking over power and kicking out the old clan. In the capitalist west, this is much different. I personally think the best place is where the intellectual elite chooses to live. E.g. in the early medieval ages, the church harassed a bunch of intellectuals for their "heathen" ideology (greek philosophy, sciences, etc). So they all moved to the middle east, causing a great period of prosperity. Socialism, similar thing here. Russia had so many great minds. Scientists, authors, poets. But many of them went to the west and are still doing it. Same for germany btw, here eastern Germany was a big hub of culture, e.g. Leipzig was renown for its books, but socialists harassed and hated every intellectual (even more than they harassed the general population), so many of them fled to the west, so many in fact that they had to build a wall to keep them in. The western part of germany greatly profited from this brain drain. It's not dangerous to democracy if these autocrat regimes build luxury condos that nobody lives in. It's dangerous when they build luxury condos and the elite choses to live there. In our world which is so much dependent on science and engineering, they chose which country, which region inside a country, prospers and which doesn't, simply by chosing where they live.
  - foldr 8y ago
    >So they all moved to the middle east This is an interesting historical claim. Which intellectuals are you thinking of that moved from Europe to the Middle East in the early Medieval period?
    - frostburg 8y ago
      It's more accurate (somewhat) to say that a lot of intellectual activity moved. The issue is historiographically complex but the traditional view of early medieval Europe not doing a lot to advance human knowledge except in some specific (and not very abstract) fields is mostly true.
Cthulhu_ 8y ago
For claiming to be high-end brands, the amount of Gucci, Swarovski, Prada et al shops really cheapen them as a brand. I've seen similar stuff in vacation destinations in Turkey and Greece; poorly developed areas next to a road (think just bare rock and shrubs) with a super fancy looking fur coat shop. Fur coat shops, in 35+ degree C weather. I want to believe they get the odd rich Russian coming over from time to time, but TBH they're probably money laundering fronts.
- lotsofpulp 8y ago
  They're not "high end" brands anymore. The companies that own the brands have it down to a science, every few years they start lowering one of the more expensive brands down, and the masses start using it as a status symbol, until too many of the masses have it, then rinse repeat with another more expensive brand. See Fendi, Gucci, Swarovski, Michael Kors, etc. The most recent one I noticed was Yves Sant Lauren, with their items badged with an ugly YSL logo. Basically, if you see middle income people start carrying around products badged (having logos on it is itself a signal that it's not high end) with the brand and sold in Macys, it's being stripped of it's high end status. And then even the middle income people start noticing everyone has it, so it devalues it for them, so the fashion brands need a new company to present as "high-end".
  - yostrovs 8y ago
    They can always come up with another hard to pronounce French-like name.
CathayRe 8y ago
>In 2012, I traveled for about 6 weeks in China. ........None of this made any sense It really doesn't. That is until you visit there again in 3 - 5 years times. Everything is different. You start getting lots more people and spending money. Ok it is not like everyone becomes wealthy overnight. But from Zero to having a few people actually buying, shopping and eating in these malls is quite an achievement. And they move from bottom class Third Tier cities into upper class Third Tier etc... I have seen it, it is a little hard to comprehend. I still don't know how everything was possible.
- setgree 8y ago
  When I saw the section of my comment you quoted, I thought you were going a different direction, which is pointing out that my original comment reads like a satire of HN commentary: "I dabbled in something as an amateur for like a month and now I don't believe any experts because I'm so much smarter.." Anyway, I'm perfectly happy to be wrong here, there's clearly a lot about macroeconomics that I don't know (that people don't know?). So, if you say that it's happening despite its weirdness, well, that's something. I just think we have a big enough theoretical apparatus for why state-directed economic development is inefficient that the burden of proof is on people saying "things are going well in China." Especially because we can be pretty confident that some large percent of the statistics we see on development are forged.
btbuildem 8y ago
That is an artifact of the communist way of thinking -- central committee, five year plan, etc. Forging ahead on will and politic alone, with little regard for reality, demand, supply. It is fascinating to see it combined with the forces of capitalism.. like some strange hybrid, one animal with the head of another.
thetechlead 8y ago
Lived in both China and USA for 10+ years each. Things that make no sense in American eyes make a lot sense in China. > In 2012, I traveled for about 6 weeks in China. Six weeks staying in China means nothing. China is already the 2nd largest economy but it still develops at an unprecedented rate. Urbanization in the country only reach 60% and will increase to 90% in 2030. 'Ghost cities' and empty malls will be filled very quickly in the next 3-5 years. There's actually a shortage of malls/supermarkets/schools in most communities in China, and that's the reason why e-commerce prevails and companies like Alibaba are reinventing retail. > So pretty much everything I read about China's economic development, I don't believe. You shouldn't, especially if you only read reports from Western sources, which are heavily biased and often telling only what people prefer to hear. People in the States are either ignorant on what's going in China, or so entitled to think there's only one way for how societies work.
- setgree 8y ago
  It's a fair point, 6 weeks 7 years ago is nothing. This is the data I collected, but my priors are that state-run economic development tends to be inefficient and that the stats we're reading from the CCP are false. These are pretty strong beliefs for me. But if I had more data I might come to a different conclusion.
elamje 8y ago
I have to agree with you on this even in 2018. I have been fortunate enough to travel to many places in the world and China definitely struck me as the most strange in terms of development. I constantly hear about China being an econ powerhouse, the future of the world, everyone wants access to their huge middle class, etc. But for my one week visiting Beijing and Shanghai I was confused to say the least. The most impactful thing I have ever seen was on the high speed train between Shanghai and Beijing (about 5 hours at 190 mph) and I have never seen more highrise apartments completely empty in my life. In fact, at some points, I would look out the window and see over 200 of the exact same highrise perfectly spaced and all very clearly empty. I would say a lower bound on the number of 20+ story apartments I saw in 5 hours is somewhere around 10,000. I could be off, but I was pretty attentive to it the entire ride. Most of them were empty(given the lack of any humans, vehicles, or clothes on the balcony around them). The wildest thing was seeing some of these highrises plopped in the middle of a farm. Nothing around, not even a cement road, and just an unoccupied apartment, 20 floors tall, surrounded by fields of whatever crop it was. I started to hypothesize that the massive construction SEO's in China were used to subsidize jobs for rural workers and nothing else. It seems like construction would be a good industry to try to bring lesser educated and rural populations to higher wealth due to the high need of labor. This is total speculation so please don't blast me, but it seems possible. Anyways, I was shocked at seeing this and I wonder if anyone can add other anecdotal evidence of something like this in another Chinese region. The great wall was pretty cool though:)
bparsons 8y ago
Saw the same thing in Guangzhou. New neighborhoods the size of downtown San Francisco, and barely anyone around. A few police, the odd person riding a bike, but otherwise you could throw a bowling ball down most streets and not hit anything. The more I thought about it, the scarier it became. This is a bubble that makes all before it look insignificant in comparison. The question is whether the government can guide it into a soft crash landing.

lazypenguin 8y ago

I found a similar reality in other developing countries. 1 hour outside of Dubai you can find giant luxury apartment blocks & chalet communities with 50% occupancy of basically only foreigners. A nearby deserted mall that is stock full of the top brands of everything and anything at top-dollar (literally) but just outside the "locals" live in abject poverty and work in the 50C sun. I have also seen in it Uzbekistan where a newly invigorated government rushes to throw up skyscrapers and luxury apartment complexes that nobody can afford while the local populations still lives in soul-crushing conditions. My theory is that many developing countries use the wrong metric to gauge their success, looking to count their skyscrapers or their advanced techno-cities but fail to see that the success of "developed" countries lies more in their justice and governance systems.

est31 8y ago
Indeed, probably the biggest advantage that our societies have to the rich elite of repressive countries is the justice and governance system. The problem with being rich in one of those oppresive regimes is that you can get rich. But staying rich is much harder, because the moment you fall out of favor you will be disowned. This can change simply through a new clan taking over power and kicking out the old clan. In the capitalist west, this is much different. I personally think the best place is where the intellectual elite chooses to live. E.g. in the early medieval ages, the church harassed a bunch of intellectuals for their "heathen" ideology (greek philosophy, sciences, etc). So they all moved to the middle east, causing a great period of prosperity. Socialism, similar thing here. Russia had so many great minds. Scientists, authors, poets. But many of them went to the west and are still doing it. Same for germany btw, here eastern Germany was a big hub of culture, e.g. Leipzig was renown for its books, but socialists harassed and hated every intellectual (even more than they harassed the general population), so many of them fled to the west, so many in fact that they had to build a wall to keep them in. The western part of germany greatly profited from this brain drain. It's not dangerous to democracy if these autocrat regimes build luxury condos that nobody lives in. It's dangerous when they build luxury condos and the elite choses to live there. In our world which is so much dependent on science and engineering, they chose which country, which region inside a country, prospers and which doesn't, simply by chosing where they live.
- foldr 8y ago
  >So they all moved to the middle east This is an interesting historical claim. Which intellectuals are you thinking of that moved from Europe to the Middle East in the early Medieval period?
  - frostburg 8y ago
    It's more accurate (somewhat) to say that a lot of intellectual activity moved. The issue is historiographically complex but the traditional view of early medieval Europe not doing a lot to advance human knowledge except in some specific (and not very abstract) fields is mostly true.

Cthulhu_ 8y ago

For claiming to be high-end brands, the amount of Gucci, Swarovski, Prada et al shops really cheapen them as a brand. I've seen similar stuff in vacation destinations in Turkey and Greece; poorly developed areas next to a road (think just bare rock and shrubs) with a super fancy looking fur coat shop. Fur coat shops, in 35+ degree C weather. I want to believe they get the odd rich Russian coming over from time to time, but TBH they're probably money laundering fronts.

lotsofpulp 8y ago
They're not "high end" brands anymore. The companies that own the brands have it down to a science, every few years they start lowering one of the more expensive brands down, and the masses start using it as a status symbol, until too many of the masses have it, then rinse repeat with another more expensive brand. See Fendi, Gucci, Swarovski, Michael Kors, etc. The most recent one I noticed was Yves Sant Lauren, with their items badged with an ugly YSL logo. Basically, if you see middle income people start carrying around products badged (having logos on it is itself a signal that it's not high end) with the brand and sold in Macys, it's being stripped of it's high end status. And then even the middle income people start noticing everyone has it, so it devalues it for them, so the fashion brands need a new company to present as "high-end".
- yostrovs 8y ago
  They can always come up with another hard to pronounce French-like name.

CathayRe 8y ago

>In 2012, I traveled for about 6 weeks in China. ........None of this made any sense It really doesn't. That is until you visit there again in 3 - 5 years times. Everything is different. You start getting lots more people and spending money. Ok it is not like everyone becomes wealthy overnight. But from Zero to having a few people actually buying, shopping and eating in these malls is quite an achievement. And they move from bottom class Third Tier cities into upper class Third Tier etc... I have seen it, it is a little hard to comprehend. I still don't know how everything was possible.

setgree 8y ago
When I saw the section of my comment you quoted, I thought you were going a different direction, which is pointing out that my original comment reads like a satire of HN commentary: "I dabbled in something as an amateur for like a month and now I don't believe any experts because I'm so much smarter.." Anyway, I'm perfectly happy to be wrong here, there's clearly a lot about macroeconomics that I don't know (that people don't know?). So, if you say that it's happening despite its weirdness, well, that's something. I just think we have a big enough theoretical apparatus for why state-directed economic development is inefficient that the burden of proof is on people saying "things are going well in China." Especially because we can be pretty confident that some large percent of the statistics we see on development are forged.

btbuildem 8y ago

That is an artifact of the communist way of thinking -- central committee, five year plan, etc. Forging ahead on will and politic alone, with little regard for reality, demand, supply. It is fascinating to see it combined with the forces of capitalism.. like some strange hybrid, one animal with the head of another.

thetechlead 8y ago

Lived in both China and USA for 10+ years each. Things that make no sense in American eyes make a lot sense in China. > In 2012, I traveled for about 6 weeks in China. Six weeks staying in China means nothing. China is already the 2nd largest economy but it still develops at an unprecedented rate. Urbanization in the country only reach 60% and will increase to 90% in 2030. 'Ghost cities' and empty malls will be filled very quickly in the next 3-5 years. There's actually a shortage of malls/supermarkets/schools in most communities in China, and that's the reason why e-commerce prevails and companies like Alibaba are reinventing retail. > So pretty much everything I read about China's economic development, I don't believe. You shouldn't, especially if you only read reports from Western sources, which are heavily biased and often telling only what people prefer to hear. People in the States are either ignorant on what's going in China, or so entitled to think there's only one way for how societies work.

setgree 8y ago
It's a fair point, 6 weeks 7 years ago is nothing. This is the data I collected, but my priors are that state-run economic development tends to be inefficient and that the stats we're reading from the CCP are false. These are pretty strong beliefs for me. But if I had more data I might come to a different conclusion.

elamje 8y ago

I have to agree with you on this even in 2018. I have been fortunate enough to travel to many places in the world and China definitely struck me as the most strange in terms of development. I constantly hear about China being an econ powerhouse, the future of the world, everyone wants access to their huge middle class, etc. But for my one week visiting Beijing and Shanghai I was confused to say the least. The most impactful thing I have ever seen was on the high speed train between Shanghai and Beijing (about 5 hours at 190 mph) and I have never seen more highrise apartments completely empty in my life. In fact, at some points, I would look out the window and see over 200 of the exact same highrise perfectly spaced and all very clearly empty. I would say a lower bound on the number of 20+ story apartments I saw in 5 hours is somewhere around 10,000. I could be off, but I was pretty attentive to it the entire ride. Most of them were empty(given the lack of any humans, vehicles, or clothes on the balcony around them). The wildest thing was seeing some of these highrises plopped in the middle of a farm. Nothing around, not even a cement road, and just an unoccupied apartment, 20 floors tall, surrounded by fields of whatever crop it was. I started to hypothesize that the massive construction SEO's in China were used to subsidize jobs for rural workers and nothing else. It seems like construction would be a good industry to try to bring lesser educated and rural populations to higher wealth due to the high need of labor. This is total speculation so please don't blast me, but it seems possible. Anyways, I was shocked at seeing this and I wonder if anyone can add other anecdotal evidence of something like this in another Chinese region. The great wall was pretty cool though:)

bparsons 8y ago

Saw the same thing in Guangzhou. New neighborhoods the size of downtown San Francisco, and barely anyone around. A few police, the odd person riding a bike, but otherwise you could throw a bowling ball down most streets and not hit anything. The more I thought about it, the scarier it became. This is a bubble that makes all before it look insignificant in comparison. The question is whether the government can guide it into a soft crash landing.