Building debt

Read in NRC Handelsblad of 28 August 2015:

Prime minister Li Keqiang of China is in a difficult political position. For more than seven weeks now the Chinese exchange is in a crisis. Li Keqiang, the Amsterdam based newspaper NRC Handelsblad reported, has an agenda of restructuring the Chinese economy, but will he succeed?  His biggest problem is a national debt of 28.000 billion dollars, that is 282 percent of Chinese Gross Domestic Product. Cause of this huge debt is a policy of stimulating the national economy for so many years. How? By building ghost cities. At least that’s more or less what I read in Wade Shepard’s ‘Ghost Cities of China’ (2015). It is “the story of cities without people in the world’s most populated country.” Shepard, from New York, has made a living as an archeologist, a geographical researcher, a journalist, a farmhand and an independent blogger. In 2005 he ended up in China for the first time. Chinese cities and their fast growth fascinated him from the start, that’s why he decided to write a book on the subject. Something was going wrong. Next to his book he also produced a website on ghost cities: www.ghostcitiesofchina.com.

On page 48 of his book Shepard mentions the prime minister for the first time. In 2000 Mr. Li Keqiang was governor of Henan province. His speciality: promoting economic growth by urban development. Zhengzhou, Mr. Li Keqiang decided, should be the new economic hub of central China. That’s why he started building Zhengdong New District in 2003: a modern, better functioning, car-friendly complement to the existing city. In 2015 Zhengdong New District was already bigger than San Francisco. By 2020 the new city will contain more than 5 million inhabitants. Li Keqiang invested 25,8 billion US dollars on the urban scheme. Shepard: “It is often said that he (Li Keqiang) is the architect of China’s broader new city movement. This ascension is partially due, no doubt, to his role in Zhengzhou.” Zhengzhou now has more than 11 million inhabitants and is growing at a rate of 9,4 per cent per year. Mr. Li Keqiang moved to Beijing and became prime minister. His task is fighting debt. It’s a pity his speciality is building new cities. They cost a fortune and take a long time before they thrife. He should transform old, bustling cities: the real economic powerhouses.