Various media outlets have recently been abuzz with talk China’s economy. The word of the day seems to be “overheating”, following closely by the words “out of control investment”. I’m not one to obsess over economic indicators, but I find it amazing how China’s out-of-control growth is so, well, glaringly apparent in everyday life.
Riding on Hangzhou’s elevated highway, looking out on the cityscape is rather mind boggling. Before your eyes unfolds an endless tableau of cranes and green scaffolding. But perhaps the scariest thing is the scale these projects. Gargantuan is the only word to describe them. Some buildings under construction seem ready to accomodate all of Hangzhou’s citizens in one single highrise. Other developers have their own particular logic: why build one tower when you can build fifteen all at the same time?
Across the Qian Tang River, Hangzhou seems to be building a whole new city. You’ve got the usual several dozen towers all going up, not to mention some massive stadium/convention hall/space station. Despite talk of the central government reining in out-of-control loans in the real estate sector, I see little evidence of this on the streets. If a city block doesn’t already have a hulking tower under construction on it, then it is a demolished lot about to have a hulking tower under construction on it. Sometimes I wonder if there are more cranes in China than people.
So amidst all this talk of bubbles and overheating, I am a bit worried. Unlike other less material forms of investment, gigantic real estate projects leave pretty permanent monuments to economic folly. But it’s fairly obvious that caution is not of much concern in these parts: the instant cities continue to rise up unabated, skyscraper cluster by skyscraper cluster. If the real estate frenzy is a sign of China’s economic health, we might be in for some trouble. I for one hope they find enough people who can afford these places, because no one benefits from a city of white elephants.