Hmm, just a bit of food for thought for today's shorter than short blog post. Sometimes a picture tells a thousand words. The following videos are of the new SoHo shopping complex in downtown Beijing. The centre consists of about 10 high rises and hundreds and hundreds of shops. Well, there were hundreds. Six months after opening, the place is almost a ghost town. In the first video, I take my camera inside the building.
I see so many of these kinds of places in China now. How does it all hang together if nobody is buying or selling anything. I don't know, to be honest. Part of the answer may lie in what some Chinese have told me. These places are just a front for dirty money - places where cashed up Party members hide their cash.
I couldn't help but thinking as I was walking through this place that there is at least some chance that the entire China edifice is going to come crashing down. To be honest, I have had an intuition of this for some time. But I don't like making predictions. Having said that, I would not be surprised if 2012 was a major shifting point for China.
Fascinating, and baffling, as you say. These can't have been built on the basis of any kind of realistic market forecasts either, as there were loads of empty malls already a couple of years ago. Part of the explanation undoubtedly is that the Party controls the banks, so that people with connections can easily borrow money with no questions asked. Meanwhile the poor old 'laobaixing' get effectively negative returns on their savings. Someone's going to want to change this sooner or later.
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