Villas In The Fields

This is Hubei Province, Xuan En County. A row of villas have been built over what was formerly the farmers’ homes. From a distance, the houses look pretty attractive. Next to the main road are some of the original houses of the farmers. They all look very decent but could be acquired for redevelopment in the future.

The development is called Yu Long Wan or Jade Dragon Bend. Most of the buildings were not occupied yet. Some are undergoing renovation. Mr Shi sees an irony here. Farmers have been trying hard to move into the cities but somehow, there are projects here that attract city dwellers to live here. Somebody explained that the sole purpose behind these projects is to fatten developers with connections. Regardless of whether there is demand, getting involved in such projects gives the developers access to massive amounts of bank loans. It shouldn’t surprise anyone that the corn field may eventually be developed as well.

Scenic as the surroundings are, there is no telling whether these houses will eventually be occupied or abandoned. The problem of food shortage is aggravated by food wastage, but it is not solved by simply making every morsel count.

To understand land development in China, one must never lose sight of idioms like 面子工程,龙头蛇尾 and of course, 烂尾楼. Overbuilding is a gross understatement where the purchasing power of 1.4 billion people is often grossly overestimated. I know of Singaporeans who have not only been bitten once but twice.

In the 1990s, they’ve placed deposits for residential projects in first tier cities which ended up as 烂尾楼. At that time, they swore that they would never buy another property in China. When they hear rumours of their friends of relatives making up to 500% profits from property in China in recent years, they jumped right in, thinking that this time, it’s going to be different. Little do they realise that China’s economic miracle is balancing on the apex of a pyramid of debt.