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China's Ghost Cities and Malls

etfideas · Youtube · 144 HN points · 7 HN comments
HN Theater has aggregated all Hacker News stories and comments that mention etfideas's video "China's Ghost Cities and Malls".
Youtube Summary
Documentary by SBS Dateline (Australian TV) about the Chinese real estate market.

Original link to SBS Dateline video: http://www.sbs.com.au/dateline/story/watch/id/601007/n/China-s-Ghost-Cities

For my views and possible ETF investments to play China's real estate bubble collapse: http://etf-investment-ideas.blogspot.com/2011/03/chinas-ghost-cities-and-malls.html
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Hacker News Stories and Comments

All the comments and stories posted to Hacker News that reference this video.
A lot of China's construction efforts are due to the government's affinity for infrastructure projects that inflate GDP. The result are these ghost towns, because the cost of a newly built apartment is much, much higher than most Chinese can afford. [1]

[1] http://www.youtube.com/watch?v=rPILhiTJv7E

For a chart of concrete consumption per capita vs. GDP per capita:

http://www.zerohedge.com/news/2013-09-21/chinas-ghost-cities...

dragonbonheur
The famous 'ghost town' of Ordos has actually been sold out. The Chinese are actually buying extra housing instead of keeping their money in banks. Source: http://blogs.aljazeera.com/blog/asia/ordos-boom-town-ghost-t... Source 2: http://www.nytimes.com/2010/10/20/business/global/20ghost.ht...
letstryagain
These 'ghost towns' will still be there in 10 years and the buildings will still be valuable. Eventually they'll get used. The 'ghost town' problem is overstated.

“No question, there are towns (some city-like) with empty buildings for the world to see. And, there certainly have been cases of poor planning and overbuilding. But as my team and I travelled around China, it was clear to us that those represent a small sample of projects and not the country as a whole.”

-- Mark Mobius

Anyone who thinks China's growth is real needs to watch this:

http://www.youtube.com/watch?v=rPILhiTJv7E

Jan 10, 2012 · MrVitaliy on Go East, Young Man
Just watch/read the news

http://www.youtube.com/watch?v=rPILhiTJv7E

Foxconn is an interesting mega-beast. It has a campus that houses 500k people and employees 1 million.

Just think about that... when was the last time you heard of a company employing more than like 200k people world wide and this company employees 1 million at it's production facility in China.

Apparently living and working conditions aren't great, we all read the followups to the original suicides. From what I gathered they were extremely barren, but better than the alternative of sleeping on the street in that city. They made it sound like if you try and get by in the city on your own, and you are low-income, it is incredibly vicious (mugging, etc.)

What I find interesting is that as these people fight for better conditions and increased wages, Foxconn's reply is "Whatevs, we are getting robots to replace you".

In the next 3 years they are looking at rolling out 1 million robots to replace workers, I imagine slowly firing 50-70% of their workforce. The only way I see these people not getting fired is the Chinese govt, in an attempt to stem riots[1], requires Foxconn to keep most of them employed.

This is an interesting twist of the future... I suppose some part of me assumed that by 2020+ machines would be making most of what I use, but when I look at the scale of jobless people as a result of it, it really makes me scratch my head to figure out where we fit in the future.

Our only salvation seems, at least for now, to expand ourselves in creative professions that cannot be performed by machines (yet).

When AI finally becomes mature enough to model a human (I don't really expect that to be very far off. Our compute power is getting ridiculous) I imagine that won't be off-limits for robots either and our job as humans will be just to exist and experience... nothing more.

tl;dr - assume robots and AI get sufficiently advanced to do most everything physical and most things that are deemed creative... what IS our purpose here then?

[1] http://www.youtube.com/watch?v=rPILhiTJv7E

xsmasher
This has happened before, to the 90% of humanity involved in hunting and gathering whose jobs were displaced by Agriculture. It happened again when agriculture and textile production became mechanized.

It was accompanied by massive social upheaval, but it didn't lead to either a crapsack post-apocalyptic unemployscape nor a prefect utopian leisure world. Not from our point of view anyway; you'd have to pluck a 7000 or 300 year old man from his world into ours to find out what he makes of our progress.

aaronsw
"I suppose some part of me assumed that by 2020+ machines would be making most of what I use, but when I look at the scale of jobless people as a result of it, it really makes me scratch my head to figure out where we fit in the future."

This is a common economic misconception. If, by some lucky twist of fate, machines can make everything we may ever want, it'd be great! We can just all lie around and enjoy utopia.

SoftwareMaven
Somehow, I can't imagine a bored and aimless population of billions building utopia. Bored people tend to be troublesome people, so if there isn't enough Farmville, we might be in trouble.
walkon
I'm not sure how excited and fulfilled one can be by doing a simple and repetitive task several hundred times a day.
None
None
amcintyre
I can't tell...are you talking about the jobs the robots will be doing, or playing Farmville?
prodigal_erik
Farmville is a good example of the kind of drudgery which robots should relieve us from.

I thought this was going to be a joke but, just like WoW and EVE mining, I see that it is actually happening: http://farmvillebot.net/ http://www.femfarmville.com/

notatoad
funny you mention farmville, as actually working on a farm is one thing that the robots have yet to master.
tonyedgecombe
Farming has benefited massively from automation and will continue to do so:

http://www.wired.com/science/discoveries/news/2007/06/robo_p...

rkalla
Good point, I wonder if we will need to create virtual realities for ourselves just to stay "occupied"

... here is a meta though... what if that is what we live in NOW, hence all the talk about "is our reality a hologram?" recently.

Inceptioned! :)

gregpilling
The downside of the utopia is the sheer amount of things that the robots can produce. Then what do you do with all that stuff?? That is a theme of the story "Midas Plague" by Frederik Pohl.

"The Midas Plague" (originally published in Galaxy in 1954). In this new world of cheap energy, robots are overproducing the commodities enjoyed by mankind. So now the "poor" are forced to spend their lives in frantic consumption, trying to keep up with the robots' extravagant production, so that the "rich" can live lives of simplicity. This story deals with the life of a man named Morey Fry, who marries a girl from a higher class. She is unused to a life of consumption and it wears at their marriage. Morey eventually hits on the idea of having the robots help him to consume his quotas. At first he fears punishment when he is discovered, but instead the Ration Board quickly implements his idea across the world."

http://en.wikipedia.org/wiki/Midas_World

bd_at_rivenhill
One thing that everyone is missing in all of this is the incoming demographic crash. Western Europe, the US, Japan, and China will be heavily affected by this. Automation will allow the remaining workers to produce the goods and services necessary for the wealthy countries as populations age. The real losers will be the countries that have not climbed the industrialization curve by the time that the cost of producing goods locally falls below the cost of transporting them from countries that have cheap labor. Once this happens, those countries that are not advanced enough to have local production will have to find some other way to reach a modern, consumer-oriented lifestyle. I might be willing to bet on Southeast Asian countries like Vietnam, Malaysia, and Indonesia that have the advantage of being close to current manufacturing centers both culturally and physically, but I would not bet that modernization will provide any alleviation of the suffering experienced by Africans in the same way that it is improving living standards in China. Difficult for me to say how India will fare since I have little experience there and the depth of its democratic tradition makes it difficult for centralized decision making to drive the economy forward at the same rate that East Asians have achieved.
wallflower
> but when I look at the scale of jobless people as a result of it, it really makes me scratch my head to figure out where we fit in the future.

Read "Manna" by Marshall Brain for a vision of the caste system that may happen

http://www.marshallbrain.com/manna1.htm

rkalla
Thank you for the recommendation, 3 chapters in and this is fascinating (horrifying/thought-provoking)
nextparadigms
"Our only salvation seems, at least for now, to expand ourselves in creative professions that cannot be performed by machines (yet)."

Yes. We have to move "up-market" in the job market, just like the disruptive innovation theory says. But this will also create many more opportunities for us. Automation of work is not new. And in the few last decades that we've used it intensively, it has only led to the growth of country economies and to a more advanced society, with more opportunities for non-physical work.

Now, what happens when robots become "smarter" than us at everything we can do and can think for themselves? That's harder to predict right now. But it doesn't necessarily mean we'll become their slaves. We might still use them as our "tools", or worst case scenario we'll literally merge with technology to keep pace with them, but I don't think that will happen until nano-technology is mature enough (http://www.nanofuture2030.com is an interesting blog on this).

In a way we're already starting to merge with technology, just not physically yet. If we watch the trends in computing since the birth of the mainframe, computers have become ever more "mobile", smaller and more "personal", from Mainframe > Mini-computer > PC > Notebook > Smartphone.

Whatever the next big computing paradigm will be, I know that "device" will be more mobile, smaller and more intimate with the human being.

hackinthebochs
>Yes. We have to move "up-market" in the job market, just like the disruptive innovation theory says

You seem to have a lot of faith in the average person's ability to move "up market". Personally I don't see this becoming a reality. Furthermore, the creative and knowledge jobs needed are orders of magnitude fewer than manual jobs to provide for the same amount of production in society. The welfare state will have to become the norm and getting to that point will require major social upheaval.

nextparadigms
I didn't say we have a choice. It is what it is. We could try to slow it down by not embracing it and making laws against it, but unless the whole planet agrees on this, then it's pointless and will only end up making the country that writes such laws to fall behind the others.

But I have faith in humanity's ability to adapt. It's not that hard to learn a new job. And I think automation throughout the society helps everyone's job become easier.

The way I see tools are becoming easier and easier, and the barrier to entry is lowered so more people can create websites, or do marketing, and so on.

hackinthebochs
>I think automation throughout the society helps everyone's job become easier.

I don't think your considering the situation where the tools can do the job completely. The major difference now between past production revolutions was that the limiting factor was still human labor. The tools made the jobs vastly easier, but it still required a human operator. When you can take the human operator out of the equation completely, you're on entirely new ground.

>the barrier to entry is lowered so more people can create websites, or do marketing

These are all jobs that depend on orders of magnitude larger industries to survive (marketers need a thriving economy to create added value to justify their cost).

It seems like we're doing the same thing the finance industry did with the housing market: past history showed that housing prices always go up, so we'll assume they'll keep finding a way to go up. This completely ignores the fact that this time is vastly different than past situations. There has to be some upper limit here. If we want to assume we'll just keep going up and up (the knowledge work ladder), you need an argument that explains why there is effectively no upper limit.

omarqureshi
Still though - someone will have to design, make and maintain the robots? Its still pretty gloomy, but until the time that robots can make better robots, there will still be a place for us.
choko
True, but you are still loosing a significant number of human workers. You don't need 1000 humans to maintain 1000 robots, and those jobs won't be attainable by most people - especially the people the robots were designed to replace.
DanielRibeiro
Regarding automation, I allways keep in mind Knuth's writting on the subject[1]:

The field of "automatic programming" is one of the major areas of artificial intelligence research today.

In this sense we should continually be striving to transform every art into a science: in the process, we advance the art.

[1] http://www.paulgraham.com/knuth.html

diminish
I am afraid AI will soon claim creative jobs too. So I am afraid of my designer job.
yannis
This will only happen, when robots will be able to dream. Feel safe!
mcritz
As soon as AI can accurately express the human condition as well as Bob Dylan I'll be worried. Meanwhile, we've got this: http://video.nytimes.com/video/2010/06/24/science/1247468035...
pizza_
> Foxconn is an interesting mega-beast. It has a campus that houses 500k people and employees 1 million.

> Apparently living and working conditions aren't great, we all read the followups to the original suicides.

A few dozen suicides over 5 years given a population of one million is significantly below the U.S. national average.

http://www.nimh.nih.gov/health/publications/suicide-in-the-u...

shareme
one point..

FOxconn views moving to using robots as ideal because the costs of recruitment of workers went up not increases in wages. In other words despite increasing wages they have a hard time finding workers to fill the factories. So not the 'replacing workers' like you claim.

rkalla
Thank you for the correction; I tried to edit the story but it looks like I'm past the time limit.
hackinthebochs
It always makes me scratch my head when people brush off the coming automation revolution by saying "they'll just get other jobs". The point is, eventually, there will be no jobs at all. This is going to require a major rethinking of our social structure. Even the process of getting to that point will be slow and cause severe economic and social upheaval. We need to be thinking about this now before we have 10 million rioting in the streets because there are no jobs left.
xsmasher
That's the Luddite argument to a T. I mean the historic, literal Luddites, not the modern figurative use. They were hand-weavers, worried that mechanical looms would put them out of business. They were right, and they were subject to severe financial hardship. No force on earth could have stopped the change taking place, though.
hackinthebochs
The difference is the pace and the scale. When its not just hand-weavers, but large swaths of society being made obsolete in a matter of years, we can't expect it to play out the same way as in the past.
riffraff
isn't this a simplistic view?

The industrial revolution was effectively covering the whole society, making a host of jobs obsolete in a matter of years, not only hand weaving. The same happened for the second industrial revolution, or the "green revolution".

Why should we expect this time to be different?

hackinthebochs
Previous revolutions didn't make people obsolete because it still required human labor to drive the increased production, and because the growth in productive capacity mostly equaled the growth in population and demand.

The automation revolution will be different because supply can suddenly outstrip demand by orders of magnitude. Wealth as we currently view it will essentially be limited by availability of natural resources rather than human productive capacity.

burgerbrain
What do you propose? We cannot stop it, nor should we even try to. The best you can do is to be aware of what is happening, and surf the wave rather than get creamed by it. Some people are going to come out poorly, but that is just the nature of the beast that is life. Don't waste calories worrying about them.
hackinthebochs
I don't think we should try to stop it. But I think the process of transitioning our society will be extremely painful. We can help mitigate a disaster by planning for it. It begins by first accepting that there will likely be huge social unrest as the process unfolds.

As automation takes over, there will be huge segments of society unable to maintain their standard of living. We need to begin to rethink our ideas of ownership of wealth and resources.

nextparadigms
I think it's wrong looking at this as a "disaster". There's nothing good about a natural disaster, while history has proven again and again that paradigm shifts, while also having a negative side effect in the short term, have a much larger positive effect in the long term.

Take a look in the mobile industry. Is Nokia crumbling down and laying off a lot of people? Is RIM doing the same? Both former leaders in this market. Yes they are, but wouldn't you agree that what has come out of this is much better for everyone?

People need to stop looking at "saving jobs" in a time like this. The focus should be on "creating jobs". Let the jobs that need to disappear in order to have progress, disappear. If you're arguing against that, then you're arguing against the very nature of progress and evolution, whether it's biological, economical or technological.

For example in a time of "economic crisis", which happens about every 10 years or so, you should let that crisis kill the inefficiencies in the system! And then focus on taking advantage of it to create new businesses that are much more efficient and can deal with the new conditions, and from that you'll also have more jobs.

ximeng
People can just sit around going to restaurants, doing art, doing exercise, travelling, sitting in cafes, surfing youtube. Lots of jobs today are of dubious utility, and lots of people with jobs waste a lot of their time surfing the internet and doing other marginally productive work.
hackinthebochs
I agree with all that. The point is the current social structure isn't set up for that. We still distribute resources based on how much money you can earn. When there's no money to earn, we need an entirely new framework.
None
None
ugh
It sort of is, a little bit. No one in Europe has to die without work, they don’t even have to starve. It’s not a pleasant life, certainly, but it shows that a massive change of our social structures wouldn’t be necessary, we would just have to extend what we are currently doing.
rkalla
hackin,

I've been reading your replies and thought this summed up what you've been saying in other replies. Exactly spot on that the framework for society we have no is not capable of handling/supporting what I'll call the artistic/spiritual re-revolution that may occur after machines take over all (for the purposes of this argument) jobs.

That being said we still need to be mining and creating raw resources to make the robots for the automation and the devices, so someone at the top will be holding a giant leash around that process and they will, in reality, have the power to exert whatever reality they decide on down onto all of us if we want our robots, automation and gadgets.

rkalla
I very much agree that this point will eventually be reached. We won't suddenly stop automating tasks and making those automations more and more functional.

It'll be interesting.

I've spoken to people that feel our role will be to move back to an intellectual time of philosophy and cultural advancement while our mechanical counterparts take care of everything else.

As a side-note, part of the Animatrix compilation was an anime short by a famous animator that portrayed the future where we have throngs of robot slave labor. Just abusing, destroying, crushing and pushing them harder and harder, throwing them away as they are "injured".

It was a perverse vision to be sure and only made more perverse by the need to make the robots human-like and then eventually given them AI (in the anime at least).

All of these things will be unexpected challenges.

Will you cringe in 2040 when you see a humanoid robot fall from a skyscraper or accidentally have a tractor drive over it while moving something big?

These are the strange/unexpected/unprepared scenarios I think will catch us off guard.

timedoctor
Not at all. There will be different types of jobs. For example: massage, hair dresser, more beauty salons, personal assistants etc
hugh3
The point isn't that there'll be no jobs, because ten jobs building a hundred widgets an hour can be replaced by ten jobs maintaining a hundred robots that build ten thousand widgets per hour, thus making everybody significantly richer.

The real problem is that increasing automation only creates jobs for smart people, while destroying jobs for dumb people. Not everybody capable of building widgets is capable of maintaining a widget-building robot. We're replacing manual labour jobs with jobs that require a brain, but half the population still has below-average intelligence.

rkalla
Good point, but does it have a conclusion?

I think Kurzweil refers to it as the Singularity... but basically what happens when AI reaches the point where it can manage itself or advance itself?

This is certainly in the realm of "what if" because we haven't established if sheer compute power CAN get us AI that eventually becomes self-aware.

I sort of assume it can, but I don't like to make sweeping statements based on my assumptions. We might find some missing "human" link in the intelligence chain that stops computers and AIs from making that final leap once we get to that precipice.

sliverstorm
I figure we will either:

A: Be eliminated by our robot masters

B: Be kept around by our robot masters/colleagues because we are useful/equal

C: Have already integrated the machines into ourselves, or integrated ourselves into the machines

D: Laze about doing nothing of consequence, because robots do everything for us, and aren't self-aware enough to care

I'm rooting for C, with B as my fallback.

zacharypinter
Here's an interesting article on that:

http://hplusmagazine.com/2011/07/26/hear-that-its-the-singul...

"A common misnomer about the Singularity and the idea of greater-than-human AI is that it will involve a conscious, self-reflective, and even morally accountable agent. This has led some people to believe that it will have deep and profound thoughts, quote Satre, and resultantly act in a quasi-human manner. This will not be the case. We are not talking about artificial consciousness or even human-like cognition. Rather, we are talking about super-expert systems that are capable of executing tasks that exceed human capacities. It will stem from a multiplicity of systems that are individually singular in purpose, or at the very least, very limited in terms of functional scope. And in virtually all cases, these systems won’t reflect on the consequences of their actions unless they are programmed to do so."

zacharypinter
For some extra dialog, this was touched on in the latest Planet Money podcast:

http://www.npr.org/blogs/money/2011/07/29/138818388/the-frid...

georgemcbay
You're still stuck in the thinking that hackinthebochs is saying we have to get away from, just one level deeper.

If we have robots that can make widgets, how much longer from that until there are robots that are maintaining the other robots? Robots that are DESIGNING the next generation of robots?

The intelligence line which measures who can be replaced by automation is steadily rising and eventually (within our lifetimes, if you believe the singularity nutters -- I think they are wildly optimistic) it'll be higher than all of us. The riots will start a long time before then in either case.

niklas_a
The important thing to remember is that we have always been afraid of jobs disappearing due to machines. Textile workers in France in the 18th century were afraid to be replaced by automated spinning machines. Switchboard operators got mad when then the automated switchboards arrived.

New jobs keep appearing as we gain more wealth, who would have predicted jobs such as web designer or WoW gold farmer 20 years ago?

Just like the western world has moved to automated production, China will be able to do the same.

Jul 09, 2011 · 140 points, 77 comments · submitted by zacharyvoase
vorg
Can't view the video from here in China, but...

I've noticed lately developers/local govt tearing down buildings after evicting tenants, then canning the new building project ("running out of money", maybe), instead turning the land into a carpark. This creates more demand for unsold apartments nearby, (as well as giving vehicles somewhere other than footpaths to park on :).

wisty
Or the development was found unsafe (after a number have already fallen down), or they realized that the permissions were not done correctly (or at all).
whatwhatwhat
How many apartments are vacant in the US, just as a comparison, does anyone know? That would make the number much more meaningful.

Also, are these apartments dirt cheap and do they speak english in these areas at all? Maybe they could be a haven for startups, which are somewhat less bound by geography, if they were extremely cheap. I might just be dreaming though.

joss82
You may be dreaming, but you're not the only one.

What would be the hurdles to get a startup running in China? The Great Firewall?

It's a big country so it's always possible to find a place that fits your personal taste. For example Sanya is a tropical island. Not much infrastructure there yet though.

joshwa
As a foreigner you are not allowed to own a business in China. You must start a special "joint venture" company with a native Chinese partner, with something like $15-20k USD in a chinese bank. Expect to be screwed by your Chinese partner, the bank, the local government, your local vendors, your landlord, etc.
yaix
Great Firewall? Use a VPN, easy. (I'm doing it for many years).

Sanya is not an island, its a city on the island of Hainan.

Infrastructure in China is very good, especially train lines.

matwood
What is corruption like in China? IMHO, that would likely be the largest hurdle to starting a business outside the US.
None
None
wisty
Hurdles?

1) Language, especially when getting stuff like visas, work permits, incorporation, etc. You can stay on non-work (or business) visas, but it's not terribly legal.

As for the English standard, imagine you have a country with 1 point something billion people, and speaking English was discouraged until about 20 years ago (except if you were in intelligence). How do you teach it? Only young people tend to be fluent. Most English teachers have never left the country, or had much one-on-one interaction with people who can speak good English. Students are great at certain elements of formal written grammar, if it's in an exam setting. Vocabulary can be OK. But fluency can be a problem.

2) Red tape. It's non-existant for the old woman selling wonton soup by the side of the street (as long as she can run faster than the local city management, or can afford to give them lots of free soup), but not likely to be fun for foreign businesses.

3) Talent. I'm sure it's there, but you won't know how to find it. You can't tell if people are bright, unless you can communicated easily. Also,expect programmers with great geometry, good algorithms, and no idea how to work in a team; kinda like most countries, really.

4) Honesty. Chinese believe that "actions speak louder than words". If you don't understand this, and you won't, you won't understand why everyone is telling white lies to you. People may explain this as "face" related, or "high context communication", but to some people it looks very dishonest.

joss82
So, except for point 2, it's a matter of learning the language and culture thoroughly.
yaix
Depends on the city. In the city I live in, apartments cost the same as in Germany, but with worse quality. But prices go down drastically in the countryside (because nobody wants to live there).
math
Try Phonm Penh (Cambodia). You can buy an apartment for $30k in a premium location. If you can't afford to buy, you can rent something decent for $60 a week or less. Food is about a third to half the price of what you're used to paying. Western standard places that are great to work in are springing up quickly now. Very friendly place. A lot of people speak English. Many of them have an entrepreneurial mindset (and run or dream of running some sort of small business). If you've got an interesting enough resume and want to check it out, feel free to ping me and I'll show you around (and depending on the state of the renovations you can stay one of my spare rooms).
w1ntermute
What kind of work do you do? I'm in college (CS major) now and am planning to start freelancing on the internet soon and continue that as my permanent job after I graduate. If I relocate abroad to a developing country but pretend to be located in America (just use my parents' address or something), I could make a killing off of this sort of thing and have a relatively high standard of living in a country like Cambodia.

Is the internet there fast/reliable (censorship isn't important because I can just use a US VPN)? How's the weather?

ams6110
Starting off your professional life by being deceptive is not something I'd recommend.
w1ntermute
I'm a native-born American, with a degree from an American college. I don't see why my pay should be reduced because of my location when I'm doing the exact same work.
math
ams6110 is correct, I'm not sure why he is being down-voted.
math
I develop software. I did this for 10 years in Australia before moving here and because of this have relationships with Australian companies that would allow me to do contracting work remotely for good money if that is what I wanted (however at the moment I'm working on personal projects, currently backrecord.com). You are right - GNI per person in Australia is ~$42k (assume it is similar for USA). GNI per person here is $650. So you live like a king.

Internet is reliable and fast enough (I use a 3G connection and this is very cheap). There are many telcos so lots of competition.

Weather is hot and at the moment wet. I love the weather.

btw: I don't think you'd ever get away with pretending to be located in America.

w1ntermute
> GNI per person in Australia is ~$42k (assume it is similar for USA). GNI per person here is $650. So you live like a king.

Yeah, US is $46k according to Google. Can you afford a chef, maid, and chauffeur? That would be absolutely awesome! (Sorry if I sound a little too giddy; I come from a lower middle class, rural background, and the thought of doing software development while living like a king in a faraway tropical paradise sounds absolutely magical.)

> btw: I don't think you'd ever get away with pretending to be located in America.

Why is this (honest question, I really don't know much about freelancing yet)? The time difference? For phone calls, I'd use Skype to get an American number I could give clients, and my parents would have no problems scanning & emailing any documents that might arrive in the snail mail.

whatwhatwhat
Because you aren't actually in America.
w1ntermute
Yes, I already gleaned that much. My question is how a client I would only communicate with over the internet and/or phone could possibly know this.
VMG
You have to appear in person to get certain paperwork done.
w1ntermute
How often do you have to do this sort of thing? Is it per client, or if you use a freelancing website, can you do it just once at the beginning?

And if you can build some relationships before leaving (I'll be doing it for a while before I graduate from college), would it then be possible?

wallflower
> > btw: I don't think you'd ever get away with pretending to be located in America.

If you are an American citizen, you have an obligation to pay income tax on your earnings. The same goes for many countries.

w1ntermute
Some more questions:

Is it difficult to wire money from America to developing countries like Cambodia?

For those cases where the people don't speak English, is it particularly difficult to learn the language when you're actually immersed in it on a daily basis?

What is the local social scene like? Is there a large expat community? If not, are the natives welcoming?

Hopefully it'd be possible to get some action. I don't mean to be crude, but that's sort of a requirement for me (and a lot of guys) to live in any place. It's obviously not an issue anywhere in America, but it certainly can be abroad. I have quite a few high school friends in the military, and those stationed in Japan and Korea have no problem getting local women, but Afghanistan and Iraq are a completely different story.

math
You can open a bank account at all banks if you have a local job. If not, Foreign Trade Bank are the ones to go with.

Transferring money is no problem (though the service I use to get a good rate - ozforex.com.au ask additional questions).

I've tried to learn Chinese and (a little bit of) Khmer. Khmer is much easier than Chinese, you'll pick up lots. But it's not essential.

It is VERY social, unlike any other place I've lived. Don't worry, the local girls will love you.

w1ntermute
> I've tried to learn Chinese and (a little bit of) Khmer. Khmer is much easier than Chinese, you'll pick up lots. But it's not essential.

Is Chinese used there as well, or was that just a hobby? According to Wikipedia, it looks like Khmer, unlike most SE Asian nations, is not tonal. That'd make things a lot easier for a tone deaf person like me.

> It is VERY social, unlike any other place I've lived. Don't worry, the local girls will love you.

What about the political climate? Is it less oppressive than China, or about the same or worse?

white_devil
For those cases where the people don't speak English, is it particularly difficult to learn the language when you're actually immersed in it on a daily basis?

Just hearing it all day every day won't make you suddenly magically start to understand it.

Of course, the difficulty level depends on the language. For example, many South-East Asian languages have tones and a highly bothersome writing system (especially compared to the 26 characters you're used to).

But no matter what foreign language you decide to learn, expect to make a huge effort.

w1ntermute
> But no matter what foreign language you decide to learn, expect to make a huge effort.

Haha, I guess this can't really compare to a few years of high school Spanish (not that I really learned anything from that either).

gopi
>> There are no property taxes in most of China, so people with money park it in real estate.

Exactly the case in India. Most people there park money in real estate. Also in the suburbs the official land value (determined by govt) is far less than the real market value. So investing in that kind of land is way to park black money (or corruption money).

The usual real estate factors like rent-to-own don't apply, Infact the prices in the suburbs of even a 3rd tier small city like Coimbatore is more than that in a major US metro!

signa11
>> There are no property taxes in most of China, so people with money park it in real estate. >Exactly the case in India. Most people there park money in real estate.

not true. there most definitely are property taxes in india. the reason why folks park money in real-estate is that it seems to an appreciating asset not being subjected to harsh vagaries of the volatile stock market...

yaix
>> There are no property taxes in most of China, so people with money park it in real estate.

There are now in Shanghai, Beijing and a few other major cities. That's quite new and started just this year.

prostoalex
64 million empty apartments in a country with population of 1.3 billion is sub-5%, hardly reason for panic, and typical of any rental market in the US.
tokenadult
64000000/1300000000 = 4.9 percent is only a correct estimate of the vacancy rate if you assume that each apartment is to be occupied by only one person, which is surely an untrue assumption about China and any other country I have ever lived in. And see elsewhere in this thread

http://news.ycombinator.com/item?id=2746312

a more nuanced comment posted hours earlier.

Game_Ender
An article in SF Chronicle provides some good perspective on these vacancy rates in China to backup this video: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/07/07/...

Even in the huge industrial cities of Shanghai and Beijing the vacancy rates of approximately 50% and 35%. The peak for the US during the recession was 18.5% in Michigan.

blumentopf
Nouriel Roubini on the investment bubble in China, including these ghost towns:

http://www.youtube.com/watch?v=_4yN00qGBbI#t=10m39s

blantonl
Could this type of economic activity by China be characterized as similar to the "New Deal" that the US embarked upon in the 30's? Except in this case China is attempting to stimulate their economy to "keep up" with western society?

The sheer level of organization and determination to build all these assets only to have them go uninhabited surely means that there are very conscious decisions being made at very high levels.

I suppose capitalism keeps this kind of stuff from happening in the US, since no one is going to put their own money on the line when no one is going to buy. But the flip-side of that argument could be made in that Freddie and Fanny (Government backed entities) were formed to entice the American public to finance and build the American dream home. And we see what happened over the past few years...

Those of you that are Economics or Econ/Poly Sci type folks... what is the reasoning for this type of Government behavior? I'm curious as to why China would embark on such a quest.

martythemaniak
Give the empty apartments to poor folk. You solve the high income inequality and property bubble at the same time ;)
iwwr
Simply maintaining these apartments may be too much even for the average city worker.
wisty
Whenever that happens in China, the "poor" folk who actually get the free apartments aren't always poor.

Welfare fraud is not unique to the US.

webXL
As long as these empty buildings don't fall down from neglect, and the money couldn't have been spent more wisely (i.e. these will serve a valuable service some time soon), then I don't see this as a big deal. But more than likely, the glut of resources devoted to housing means neglect in some other place of the economy.

The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design -F.A. Hayek, The Fatal Conceit

jackityquack
They do have 1,000 million people and counting. 64million is only 6.4% That isn't that high in reality. Give China a break. USA has a rental vacancy rate of 9.7% and an owner vacancy rate of 2.6%. So combined vacancy rate of 12.3%. So yeah, US's is higher. http://www.census.gov/hhes/www/housing/hvs/hvs.html
joshwa
It's starting to sound like we need an HN China meetup...

Where's everyone at? I'm in Kunming, I know maxklein was in Shenzhen for a while.

westiseast
Fuzhou! Garden city of the south! i would love a China HN meetup. Organise/post it and I'll come.
chopsueyar
The US has the empty housing, we just need the high GDP.
zoowar
Ghost cities also keep construction workers employed.
yaix
Why is this downvoted? It is a valid point. Especially in 2008/09 they were rebuilding every second road in the Chinese city I life in, even though the roads where perfectly fine and had just been finished a few years earlier. Same for apartment buildings. They can not just stop building them, because there are literally tens of millions of people getting their income from constructing those buildings.
whatwhatwhat
>They can not just stop building them, because there are literally tens of millions of people getting their income from constructing those buildings.

Don't you see why this is obviously disastrous? There are so many analogies that can be drawn -- that I'm not even going to try. If you don't see why this is obviously ridiculous then read some stuff about the invisible hand of the market (http://en.wikipedia.org/wiki/Invisible_hand). It is only a valid point from the narrow perspective of the workers involved and the employers of those workers selling their services.

yaix
Of course I "see" this. But I also see short to medium term considerations by the CN gov't of political stability in the country. Especially at a time of imminent power transition to the next political generation.

Its called "political reality".

But yeah, I read about the theory you linked to, about 10 years ago, when I studied it.

rorrr
This was posted a bunch of times

http://news.ycombinator.com/item?id=2431869

http://news.ycombinator.com/item?id=2386584

http://news.ycombinator.com/item?id=2669432

ignifero
Same thing as Dubai: A sprawling ghost-megacity.
nkassis
Would it not work if they did what Henry Ford was doing. Price them so the workers can buy them? That way the money stays in your pockets while the workers enjoy a better life? Win-Win.
iwwr
The problem is the expenses in building these things are capitalized (or worse, booked at a greater value), so when they do sell at the much lower value, the developers/banks/government will need to take a loss. So long as the selling can be delayed, the losses can be hidden. If these were just private entities, they'd take the losses and go on, but the government purse is much larger.
fleitz
The losses aren't hidden, it's what one would call a long term investment. Because the Chinese government isn't beholden to a two year election cycle they're able to think over a much longer term horizon. Whether this is good/bad in the long term remains to be seen, as a more dynamic business environment might threaten their long term vision.

64 million surplus homes in China could be filled in a heartbeat. China is not America where everyone for the most part already has a pretty decent home. The current US estimates are similar per capita, but the issue is that US doesn't have a massive supply of peasant farmers who would like much better houses in the city.

China has started to reach the point where it is fueling the demand for it's own goods similar to what happened to the US in the 20s and continued in the 50s and 60s as a generation moved from the farm to the city. In the US the fuel was lend/lease and marshall aid, for China it's trinkets for Wal-Mart.

At 100,000 USD a pop the surplus represents 6.4 trillion dollars, if you assume the units are overvalued similar to USD real estate meaning they have a 3.2 trillion dollar bubble. A 3.2 trillion dollar bubble is similar to the costs of the US bubble plus a war in Iraq and Afganistan. The only difference is the Chinese have peasants who will ostensibly drastically increase their economic output and the fact that building modest housing probably has a better ROI than war.

ycombiefan
actually war is quite profitable for defense companies
iwwr
For every year they sit empty, they depreciate physically and they also need regular maintenance. Those are actual resources being used. And if the buildings are in the wrong location altogether, it may be cheaper to just tear them down than try to find a market for them.
mousa
Every year they need regular maintenance is a year a few more people have jobs within their capacity. In a lot of areas I think high level decisions are made to keep people busy. I'm fairly positive they give huge subsidies for hiring employees, because if you walk in a grocery store every aisle has a couple idle employees. By our standards that can't make sense but for them right now I think the main goal is keeping unemployment low.
robryan
Regular maintenance may be a lot lower ongoing cost in China than America, maybe because of that it makes more sense to build ahead of demand.
yummyfajitas
Would it not work if they did what Henry Ford was doing. Price them so the workers can buy them? That way the money stays in your pockets while the workers enjoy a better life? Win-Win.

This is mathematically impossible.

Suppose your workers purchase everything they own from a company store with an X% profit margin. If you pay your employees $Y, the actual cost to you is $Y(1-X). Increasing employee pay (holding all else constant) always increases your costs.

fleitz
Henry Ford did not price his automobiles so workers could afford them, he paid his workers so they could afford automobiles.

The reason he could do this was because of the productivity gains incurred by assembly line techniques. Incidentally, the assembly line techniques also reduced the prices of automobiles to the point where an overpaid worker could afford them.

Possibly the most overlooked aspect of what Ford did is the standardization of the 40 hour work week so that his employees would have the free time necessary to make an automobile make sense.

trevelyan
Nicely done video, but I think it gets the story wrong. The bubble is not illogical to start with. Thanks to currency controls most people have no way to invest outside China. The Shanghai stock market meanwhile has huge problems with adverse selection (bad companies pay to list -- successful companies list in Hong Kong or the United States).

There are no property taxes in most of China, so people with money park it in real estate. And developers keep building these assets because they're insulated from loss in any case. If you're connected you can get zero/low cost loans. And local governments are complicit because they make money "selling" the land and don't have alternate income sources.

So no-one really cares if someone builds a massive complex and it doesn't sell: the government and developers are covered by the bank, and the bank is covered by the Central Government. This is just a distributional game in which China pays for infrastructure by using public policy to inflate bank earnings and then banks approve questionable local projects. And sometimes these things make a lot of money, so it isn't as if they're taking a hit on every single complex.

joe_the_user
The bubble is not illogical to start with. Thanks to currency controls most people have no way to invest outside China.

Now wait a sec. The bubble is illogical. That it involves individuals making rational choices in a distorted market doesn't exempt it at all.

In fact, it is a fine illustration of how distorted, artificial markets produce irrational results despite each person making choices that are logical for them.

jhancock
I'm not sure exactly what 'trevelyan means when he says its not illogical. Though I would use the same term. The housing and public market bubbles, prior to them occurring, were understood effects to China's growth plans. When I say it was not illogical, I am telling you that China's economists and other planners carefully considered this part and parcel to bootstrapping the economy.

How they handle things from here is going to be interesting and a test of the government's ability to reign in corruption and clean up financial loses where needed...and about a thousand other things.

joe_the_user
Do you have any references to corroborate your statement that "The housing and public market bubbles, prior to them occurring, were understood effects to China's growth plans."?

I would be very interested how much discussion China's policy makers have had on this question.

I don't think it is a given at all there has been a lot of discussion around this making it to highest levels - the consequences of the US housing bubble clearly weren't expected by US leaders despite the US having many, many intelligent policy makers (some proportion of whom could certainly see the crash coming).

None
None
stretchwithme
Yep, its the artificial markets.

People have no way of investing outside of Earth either, but that doesn't mean investment bubbles have to happen.

Instead of building things people don't need, in a natural market, things are made that people are willing to pay for with their own money.

The building boom in China has been directed by government. Banks were told to loan.

The government also created the housing boom in the US, through cheap money and loosening lending standards.

In both cases, the government created incentives to do stupid things. And the markets responded as markets do to incentives.

wisty
I dunno. The government incentives aren't that big, and people do stupid stuff with and without government help.

There's no doubt that the government (and neo-liberal mainstream economists) failed to prevent the bubbles.

But there's other factors at play. Housing takes a long time to reach an equilibrium. It can take decades for people to move out of a house that's too big for them. The market just doesn't respond quickly, which is a recipe for instability and chaos (just ask anyone who's studied control theory, or chaos theory).

There might be a few players who are smart enough to see this, but the average real estate investor isn't a Wall Street quant, or even a trader. They are a 20-or-30-something year old, with no financial nous at all. They see 10 years of solid growth (due to demographic changes, income growth, and government intervention), jump on the wagon, and that creates a little more impetus.

Do you really think that the government is entirely pro-cyclical? That they choke supply, and give out free money while prices are rising; and increase supply and curtail loans while prices are falling? I doubt it. And if the Chinese government is to blame, why is it so damn regional? The Shenzhen bubble is nothing like the Beijing one, which is nothing like the Shanghai one, which is nothing like the Inner Mongolia one. Some of that is local government actions, but I dont't think it is in most places.

stretchwithme
Government incentives aren't that big? In the US or in China?

You think empty cities crop up all on their own? With no rents being collected, you think people will just keep building and tying up their capital for no reason?

If you mean the US, the incentives are not trivial. Interest rates are a big one and they are kept artificially low. You can write off your interest. You don't have to pay capital gains taxes on the first $250k of profit on a house.

There are first time buyer programs too. And standards for lenders were greatly relaxed around 2000, with borrowers no longer required to put 20% down.

Fannie and Freddie also helped by accepting the risks of loaning to buyers with less than adequate credit. Lenders had no incentive to even check the claimed income of buyers.

So, not sure how all these things aren't that big. I guess housing prices just double on their own for no reason.

wisty
First off, bubbles can have many causes. Cheap, stupid credit, feeding off itself can be the main one. The government regulates credit; so ultimately it failed its duty if credit blows up. I'm just not sure if this is your point, or if you think prescribe to the "the market knows best, any problems are caused by the mere presence of the government, and wouldn't be caused in a free-market utopia" philosophy of Alan Greenspan, the guy who arguably caused the GFC. Government inaction, and government action both can cause damage. The government does have a part to play (IMO), and sometimes it does play it badly.

Which empty cities? The one in Inner Mongolia? That was the fault of the local government.

The one in Shenzhen, where the prices are really fucking high? There is no empty city in Shenzhen, because rich investors are buying up apartment at 10-40 times the median income. Crazy investors.

There's a huge demographic component to the bubble, too. There's a massive cohort of 20-30 year olds, and bugger-all 10-20 year olds. Because rich people have less children (and there's the One-Child thing, but even if there wasn't the numbers would be similar). Guess who is looking at buying a house? Guess what will happen to demand, in 10 years? That's what I'm talking about, when I say that demographics can have an effect.

Now, we come to interest rates and inflation. Artificially low interest rates in China, yes. They can buy gold, or invest, or buy houses; but due to the massive gains that houses have been showing (due to demographic effects, and income gains I think) they pile onto houses, causing a bubble. The government pushing construction projects MITIGATES this, though they could end up overshooting (yay, apartments for poor people).

During the Great Depression, the gold standard screwed things up, as the government had their hands tied and couldn't do QE. Did the government also cause the Great Depression, by sticking to the gold standard? No doubt, if you look to blame them for everything.

stretchwithme
I'm not claiming non-empty cities are built by crazy investors.

I don't know whether particular empty cities are caused by local or national government in China, or both. I was merely arguing that government was distorting things with incentives or coercion.

Cheap stupid credit's the cause? I agree. But in a free market, government does NOT regulate the cost of borrowing money. That's governed by supply and demand in a free market. The US is not a free market in this respect. Neither is China.

The gold standard was not the cause of the Great Depression; the collapse of the investment bubble created by the Federal Reserve, along with the interruption of international trade by the Smoot-Hawley Tariff Act caused the initial problem. Subsequent interference in the economy by both Hoover and FDR extended the problems.

The gold standard merely prevented the government from inflating away the dollar and using inflation to hide the consequences of other bad policies. Its a form of discipline that the founders wisely put in place to prevent the disastrous policies that many other governments have perpetrated throughout history.

But now the constraint of the gold standard is off and much larger bubbles can be created.

westiseast
I'm pretty sure that fundamental economics are the same the world around - if there's no end consumer for your product, then there's a loss somewhere. It doesn't matter who covers the loss, but there's still a loss and it's not correct to say that no-one cares.

The biggest fallacy I've heard recently about this housing situation is the oft' repeated "things are different in China" - you can't argue with basic maths like this. Surely the 2008 economic crisis was triggered by a similar situation, with western banks and investors ignoring fundamental economic equations?

westiseast
oh, and another thing - people have no way to invest outside of China? What?

Any quick google search will tell you about the hundreds of millions of government money being embezzled by officials outside of China, not to mention rich Chinese citizens legitimately taking American citizenship and investing their money overseas...

yaix
This is mostly what happens.

Additionally, these new apartment complexes are often build in "new areas" of the bigger cities, to grow the city. China is trying hard to reach a level of urbanization comparable to the west, so they need to "grow their cities" somewhat aggressively.

I have lived in two of those newly build complexes myself. First there is not much around, roads, maybe a supermarket and a few stores. The local gov't or the developer offer the shop owners rent-free for a year or two to get them to set up their stores in the new area, because there are almost no people yet. But two or three years later, the apartments are mostly filled (either rented or sold) and the shops are paying rent too, new supermarket have arrived, and suddenly the area has become part of the city center.

Same goes for big roads. In the southern part of the town I live in, there is a huge road grid (6 lane roads, etc) already build, but there is only grassland. Come back in five to ten years, and it will be inner city area. Smart to finish the roads before it is crowded.

joshwa
What city are you in? You could very easily be describing where I am (Kunming) but I suppose it really applies to pretty much every city in China with >1mm residents.
yaix
I'm in Hangzhou, currently the most expensive city when it comes to housing, according to an article I read a few weeks ago. And it'll probably go further up, because there is a new bullet train and Shanghai is now only some 45 minutes away (down from about 2 hours).

(I may move to Kunming later this year, the weather so much better there :)

joshwa
The housing here isn't cheap, either, but neither is it outrageous. 100m2 goes for 2500-4000RMB/月. Coming from NYC and SF, though, it's a steal. :)

Ping me if you're in town.

j2d2j2d2
Everything you've said assumes these cities are going to explode with 1) enough people to buy the apartments and 2) enough people who can afford them.

Could you clarify your view on those two issues?

jhancock
Why does the price on failed buildings have to stay high? Why couldn't the government (through a bank, likely) reclaim a bankrupt project, restructure its books and basically "give away" the units?

China certainly has its share of problems. Having lots of extra housing for people to eventually move into is far from the top 10. Something related that is a bigger deal is the energy of heating and cooling housing built without 21st century insulation.

I think its useful to _not_ compare how the U.S. and EU have handled bailing out its financial institutions. China does not have to bail out its financial institutions in the same way if and when it comes to that. They could simply just let the rich take a haircut and give away a bunch of empty apartments to cool the angry masses.

trevelyan
Hey Jon,

What is Shanghai like these days? In Beijing there is a ton of vacant commercial real estate, but most of it seems to be owned by organizations with no need to lease (else why not lower prices?). Where developments like SOHO are competing is by selling rather than leasing smaller condo-style units. And while the market for apartments has slowed down, there are still people buying. Fifth ring road near Echo's place is 30,000 RMB per square meter.

I wonder more what the actual cost structure is for the complexes cited in these videos. They should be the lowest of all since they're being built on satellite territories. That said, even in a worst case scenario of total default, I wouldn't expect banks to seize the property of people they've been pressured to lend money to. And I wouldn't expect the property to remain "unowned" if it seemed like that would happen. The developers would just sell the assets to a property management company and go nominally bankrupt.

Agree about the differences between China, US and EU too, but my guess is that banks are safe, and that as individual markets get overdeveloped local governments will start adopting property taxes to raise revenue. This is NOT going to be popular with people who've already taken out a 30-year mortgage to buy a 60 square meter apartment, but that coupled with price stagnation should curtail people's tendencies to treat real estate as assets for investment instead of places to live, and push prices to whatever is logical given demographic and migration trends. Soft landing?

jhancock
From the numbers I've seen, Shanghai is not far behind Beijing...lots of available space in less desirable/developed areas, tight in others, pricing that makes no sense for buying as a home. Certainly, there is nothing "fair" about this.

What do I expect will happen? I expect a lot of people will eventually take paper losses but get to keep the home they live in at adjusted terms. Larger holdings will take losses relative to how connected they are, with a few making out very well. Municipalities will test a variety of tax schemes.

How much social instability will there be in between now and this eventuality? I can't say but can only hope level heads prevail.

yaix
Here in the city I am in, there is no problem at all selling those houses, and in other bigger cities it is similar. More and more people move to the cities if they can afford it. Better schools, better hospitals, and you Hukou (you "citizen registration card") it will not say "rural resident" anymore; to be a "city resident" is looks much better.

Buyers can be reasonably sure that those new areas will be developed a few years later.

However, for some 3 years now, the state and central gov't constantly come up with new laws to avoid that people buy many apartments and leave them empty. The new property tax in selected cities is one example. An increase in required down payment capital is another (http://usa.chinadaily.com.cn/china/2011-07/07/content_128581...). In the city I am in, you only get a bank credit for your first apartment now, to buy further apartments, you have to finance them yourself.

Buying an apartment is the safest form of investment in a country where the health system is only just being built up, and the retirement system is not widely trusted (yet). It is more the thing of the new middle class. The really rich people will try to get part of their money out of the country as soon as they can. You never know how stable the country will be tomorrow, is usually the reasoning.

A documentary on the ghost cities/malls - http://www.youtube.com/watch?v=rPILhiTJv7E
It's worse, they talk about 64 Million properties. Very good Documentary btw. http://www.youtube.com/watch?v=rPILhiTJv7E
Apr 18, 2011 · 2 points, 0 comments · submitted by evo_9
Apr 11, 2011 · 2 points, 0 comments · submitted by dirtyaura
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