China's Empty City
This story is very strange and I'm really struggling wrapping my mind around all the angles to consider.
China is currently undertaking a very interesting economic program/social experiment. The went to the middle of nowhere and built the infrastructure for a million resident city. The thing is, no one is living there except the government construction workers building the city. They named the city "Ordos" which is not so coincidentally the same name as another city of Ordos 30 miles away which is very weird considering the original Ordos City isn't a slum, it's a pretty nice functioning city. No one outside of China really seems to know what's going on. All the residences are purchased and accounted by investors who don't plan to live there. The prices of these residences are too high for commoners in China to rent. No one is actually going to move there until there is a economy that can employ them and give them shopping malls and restaurants etc. but no one is going to open up shops in an empty city. Quite the dilemma.
What to do now is the bigger question. Eventually they are going to have to get people to move there but how? I think the government is going to have to essentially "bribe" store owners to open stores in the empty city and eventually people will trickle in if there are shops. I wouldn't be surprised if large tax incentives are offered to businesses who move operations to the new Ordos City.
What's even more interesting is why China would undertake such an expensive project. From the video you can tell China is very proud of it's 8% GDP growth rate. When the economy turned sour 16 months ago, China introduced their own stimulus (a very modest one compared to America's trillion dollar plan) to try to sustain growth and so they just started building. This is politics getting in the way of rational decision making at it's worst. Even though China is officially communist, it most certainly runs a capitalist economy. The GDP grows and shrinks naturally, that's just the way it is. Spending a gigantic sum of money on such a dubious plan will eventually catch up to the government if these types of decisions continue.
When I first saw the story I thought, this is the most retarded plan I've ever heard of. But after having thought about it, I still think its a bad plan but I'm trying to see it from an optimists viewpoint. This is the chance to plan a perfect city and not have to worry about inconveniencing people living there. Think about the concept of one way streets, everyone hates them but they exist because it was the best way to move traffic when cities got so big and it was impossible to knock down buildings and houses to widen the streets because, you know, people were there. This is basically a giant game of Sim City, a blank canvas. If China can successfully get people to migrate to Ordos City, it'll be interesting to watch what unfolds in a perfect city. If they can find a way to fill the city with limited additional expense, I still think it will be hard to justify the investment, but its at the very least an interesting idea.
I really don't have anything else to add, we'll have to see how long it takes to become a real city and if the benefits will ever catch up to the cost.
