The Blaze has reported in the past on the number of strange and slightly unsettling ghost towns in China:
But while those pictures may be creepy, imagine pictures of another set of structures laying dormant and abandoned. Imagine pictures of ghost town-like shopping malls.
Thanks to the site Also Sprach Analyst and author Christopher Pavese, you don’t have to imagine.
What’s going on here? Four words: massive misallocation of capital.
“The Union of Soviet Socialist Republics (USSR) was a single-party state ruled by the Communist Party,” Pavese writes.
“The state was structured under a highly-centralized government and a command economy, meaning both capital and resources could be mobilized quickly and proficiently,” he adds.
But as those four words mentioned in the above imply, speed and agility don’t always mean economic efficiency. Hence, misallocation of capital — the kind where entire cities are built and no one lives in them.
“[A] picture is worth a thousand word. So we’ll summarize how we view the Chinese economy’s attempt at rebalancing away from domestic investment and toward consumption with a few pictures,” Pavese writes.
“But first, consider that one of the most insightful nuggets from our visits with various local government officials was the common belief that, ‘Developing new cities and building new infrastructure will increase consumption,’” he adds.
However, to be fair, “there are shopping malls with better foot traffic (those targeting at mass market with a more balanced tenant mixed seems to be doing better than the one shown in the first photo, which are all selling high-end stuff), but even those looked mediocre,” Also Sprach Analyst reports.
(H/T: Business Insider)
Front page photo source: Also Sprach Analyst