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Empty City, China

May 14, 2010 10:28 am Arran Gold Economics and Finance

Central planning at its finest!

I was interviewed on Al Jazeera TV yesterday, for a report titled “China’s Empty City.” It centered on Ordos, Inner Mongolia, where a whole new city, constructed along central planning lines by the Chinese government, has been completed but stands entirely empty. The reporters at Al Jazeera originally approached me because of my recent blog post on “China’s Quality of GDP.” It’s one thing to write about massive state-sponsored construction projects that achieve GDP growth targets without necessarily creating any real value, but a couple of TV images can be worth a thousand words in illustrating the point.

You can view the report by clicking here.

It’s worth noting, as the report says, that despite the fact nobody lives there, virtually all of Ordos’ new apartment complexes are sold out — precisely what I was talking about in “China’s Real Estate Riddle.”