Emptiness. Neat little rows of nicely arranged Eastern Bloc Pomo apartments, a series of small boxes stacked slightly off center, breaking the monotony of the old cinderblock structures that dominate the skyline of Xiaguan, Dali Old Town's modern urban counterpart, hanging on the northern end of Yunnan, China's Lake Erhai.  They are newish, only beginning to show the inevitable rust-stains and concrete cracks that are the hallmark of over-hasty Chinese construction.  The seaside apartment units with their manicured lawns, floor-to-ceiling windows and 3 Million RMB price tags are, with few exceptions, completely empty.  They are but one of the countless new Chinese ghost towns.  And the reality they capture should make us all stop and think for a moment about the madness that continues to masquerade as logic in our system of social organization.

Dali is a tourist's paradise.  The old walled city sits wedged between snow-capped mountains which embrace it from the north, west and south, and a large lake which feeds its abundant fields to the east.  It was once a quaint historic folk-town, populated by multi-ethnic natives and the occasional wandering hippie-traveller seeking both contact with a fabled Chinese past and a chance to smoke the abundant and cheap cannabis that is a nuisance to local farmers. 

With time, the growth of affluent Chinese able to travel and the migration of laowai, or ‘foreigners’ into China for work, travel and study, Dali has slowly morphed into an uneasy cross between the facade and fantasy of Disneyworld and the lust and lunacy of Amsterdam.  On one street you can see Han (China's majority ethnic group) tour-guides parading around in traditional Bai (a Chinese ethnic minority) costumes, giving the history of the streets and temples.  They tell the tales of several-hundred year old shrines and traditional stone streets housing antique stores and art galleries.  All the while the audience remains clueless as to the fact that most of these sites were built within the past ten years.  The tour guides are telling fairy tales and the Chinese tourists remain unfazed, distracted by a glimpse of a laowai having a coffee in one of the many cafes that have popped up to feed foreign demand. 

On a neighbouring street, if one looks sufficiently foreign and male, one will be propositioned by various innocent-looking old ladies and housewives dressed in traditional clothing asking “smoka the ganja?” or “beautiful, sexy love, beautiful mama.”  Go a few more streets down and various rooms full of couches, lit by red lights and populated by bored-looking women knitting and filing their nails look out onto the cobblestone alleyways, marked by signs warning minors from entering the innocuous looking abodes.  According to taste, you can curl up on some Indian-style cushions in a darkly lit room full of young dreadlocked men and women who take turns sharing obscure music and taking bong hits while keeping an eye out for inadequately-bribed police, or else wander further up the road to have a nice cup of local coffee and authentic German pastries that rival even the best that can be found in Beijing.  Ask any local and you will hear how year upon year Dali's streets are more and more choked with half-baked foreigners and the Chinese who more often than not stop to gawk and point shamelessly at them.

It would seem to hold that Dali should be a real-estate developer's dream. The steady stream of affluent Chinese and foreigners, both young and old looking for cheap sun, sea, mountains, dope, KTV and prostitutes fulfill the sacred supply/demand formula that should make Dali a real-estate boomtown.  And yet, something has gone wrong, logic has become so twisted here that there are thousands of empty units dominating the landscape in a relatively unpopulated area.  Along neighbouring Xiaguan's seafront there are huge swathes of white-and-wood trim apartment units protected by an unnecessary gate-guard.  Despite the rumour that Chinese superstar Fan Bing Bing bought one of the RMB 3M+ units, they remain empty and show early signs of decay.  Further down the road there is an even larger and more family-oriented development of which nine out of ten units show no sign of life.  Its empty streets and unused parks feel like film sets from apocalyptic zombie flicks like I Am Legend. Further to the west, heading towards the sea, is a literal ghost town of brand-new ‘traditional’ buildings meant to house a hundred some commercial units with second-floor apartments.  Save for a bank and a derelict KTV box, it too remains still as death, with the untended plants taking their slow revenge on the hubristic interference of human greed.  To the south, even the presence of the large, picturesque campus of Dali University failed to draw sufficient interest to fill the hundreds of units which resemble American suburban homes with large living rooms and small front gardens.  They too, lie empty and have begun to show signs of deterioration.

Dali, home of the third highest growth in real-estate prices after Beijing and Shanghai, is by no means unique in the landscape of Chinese real-estate. Travel one hundred fifty kilometres south-east of Beijing and you'll come to the town of Teda, an ultra-modern cityscape with wide streets arranged in a grid, tall, elegantly designed skyscrapers and immaculate glass and steel business parks. The streets are mostly empty, with no more than three or four cars immediately visible at any moment in an area that physically resembles Toronto's King and Bay.  The buildings stand silent and empty, with only the occasional struggling business visible at the ground level. The same apocalyptic film-set feeling dominates, exaggerated further by the sheer scale of the emptiness contained in the impressive structures which dominate Teda.

Milowent. New South China Mall Down Empty Hall.

Wikimedia Commons

Visit the southern city of Dongguan and you can see the world's largest and emptiest mall, where 2303 of 2350 retail units remain unoccupied since the mall's opening in 2005.  And yet amidst so much emptiness, so much wasted manpower and material, every major cityscape in China is covered in a forest of cranes, every empty lot is home to tent-dwelling migrant construction workers.  One gets so used to the sound of clanking hammers that silence leaves the mind stunned.  In every small town like Dali, even in the most backward rural villages you can wake to the sound of jackhammers and go to sleep to the sound of bricks being dumped to build newer, bigger houses.  The madness continues as the Chinese are kept content, fed on the exaggerated growth figures provided by the government and bought into by foreign investors.  The invincibility of the Chinese economy has become an article of faith amongst Chinese of all ages and geographic locations. Even as a housing surplus is staring everyone in the face, Chinese parents put relentless pressure on grown-up children to buy housing quickly, convinced as they are that real-estate prices will continue to rise even amidst such rampant overpricing and obvious surplus.  The best estimate calculated from electricity-usage figures puts the surplus at housing for two hundred million people.  And it looks as if it will continue to grow. China's housing market and economy reflect perhaps the greatest historical example to date of the so-called ‘reflexivity’ problem of markets and perception in general.

Economists living secure in the confines of offices in New York, London, Paris and Toronto continue to provide promising outlooks on the sustainability of this mad-science experiment we use to organize our lives and call ‘the global financial economy.’  Without being one of those initiated into the mysteries of the arcane alchemy of finance economics, I know well enough that the mercurial social entity known only as ‘The Economy’ has been kept alive by Chinese money.  Now that China is high on the influx of capital streaming into its coffers, I begin to wonder what will come next.  If the American economy was brought to its knees by people who actually lived in houses being unable to meet the financial burden of their purchases, how are we to feel when the new bedrock of the global economy is a land replete with literal ghost-cities, ghost-neighbourhoods and ghost-malls? As North American economies continue to sputter, while Europeans are collectively engaged in a frantic bailing-effort to keep their ship afloat, what will we do when the last Big Bet of the global economy turns out to be a Big Bluff?  Economists be damned, when the country that is being touted as the future of global capitalism is building entire cities that nobody can afford to occupy, while the vast majority of its downtrodden inhabitants continue to struggle to make rent in the already-crumbling units built ten years ago, we finally have to wonder if it’s time we all put down the kool-aid, take a breath and decide how to deal with the mother of a socio-economic hangover that is coming sooner or later.

We learned in 2008 that it is not a good thing when a comparatively regulated, historically stable and highly esteemed economy (America) founders.  When several European economies recently showed signs of instability, the social consequences were relatively severe, most notably in Greece.  In both these examples, the worst case scenarios of massive social unrest were quelled by quick infusions of cash, a great deal of which was bankrolled by China.  We should pause to consider the situation we are in now given the flagrant signs of financial lunacy on display in China. If what have traditionally been the economically strongest, relatively socially stable states in this system could only be saved by Chinese money, what will happen if social pressure-cooker China, with no one in sight to bail it out, suffers serious economic and social malaise?  China is the back stop, the last hope of the global system, and on the ground it looks far far worse than America ever could.  Put notoriously unreliable financial data and doctored social statistics aside. Anyone who has lived here and kept their eyes open can see the cracks are already beginning to show.  

People are angry.  Most can't afford the rent on even the most decrepit apartments, illness means costs that crush entire families and corrupt cash-hungry hospitals seem more interested in bleeding families dry than in curing illness.  Those unlucky enough to be maimed in unsafe factories and on dangerous construction sites end up dragging themselves along the pavement like dogs, singing, bowing and begging for money.  The privileged few drive their cars fast and with little regard for the pedestrian lives they endanger, honking their horns at anything not bigger than them that gets in the way, rules of the road be damned.  Housing prices go up while salaries for most remain relatively stable, and all the while people are fed a steady stream of xenophobic, hyper-nationalistic ideas on ubiquitous television screens at home, on public transport, at banks and businesses.  

It seems everywhere you turn you are confronted by screens showing Japanese soldiers committing atrocities, foreign governments insulting China and other people getting rich. Outside  China the world celebrates the current life-support system of the sacred ‘Economy’; China the Red has become China the Messiah.  It is important that the optimistic fantasies that are spewed out on a regular basis by major media outlets and backed up by dreamt-up figures by experts in air-conditioned offices are exposed for what they are: wishful thinking about a severely broken system.  The facts on the ground reveal an ugly truth, that China is a ticking time bomb, with consequences that go beyond such trite measures as consumer confidence and GDP growth and threaten to bring out the nasty, violent imbalances that have been allowed to fester unheeded in the holy name of Economy.