Thursday, 27 September 2012

In China, construction means (wealth) destruction

Guest post by Suzuki Samurai
Everything is old in China, not just the ancient stuff, but the new stuff too. Oxymoron? Welcome to China.
I commented to a Chinese colleague that I wanted to move a to a newer apartment complex, he told me that he would find me a new place and that my current residence was indeed “very old” - ten years “old” in fact. I thought I had misheard him, I thought he’d got his English numbers mixed up and corrected him, “You mean thirty years old,” he looked at me as if I was mad and, as Chinese do, used his fingers to indicate the number ten by crossing his two index fingers - like one is supposed to do to ward off vampires. Incidentally I never did move, but I can now count up to ten using one hand. (A clenched fist is also ‘ten’ by the way).
Looking around it is easy to see why things look so shabby so quickly. Time horizons are not long here. Chinese are not ones to plan, foresee, or let alone care what happens after, um… anything really. This might appear paradoxical, but the Chinese consider “what if” to be an alien concept that simply gets in the way of daily life & business; yet at the same time they are great at saving for a rainy day. This is due perhaps to having ao many and long ‘rainy days’ in the past.
Looking at the outside of buildings you’ll notice two things, the first thing is the security bars affixed to every window in the country—which keep non-existent burglars outside, and you nice and toasty inside in the event of a fire. The second is all the rust stains running down the wall from air-conditioning units. The thought never seems to cross mind of the developer or builder (or anyone for that matter) to use galvanized dyna-bolts to hold the units in place; even though it is obvious this is occurring time and time again, they continue the same practice. This might sound trivial, but when there are hundreds of these buildings in a single development, multiply these with the thousands of developments across China (did I say thousands; it feels like millions!), you can imagine the result. Added to that is the use of single coats of the cheapest paint; though I’m sure Chinese would point out it is cheaper to send legions of swinging-from-ropes painters up to re-paint every year than do it right first time.
Anyway, from paint, to screws, to cobbled common areas, everything starts off all bright and shiny; but after a year (or immediately in some cases) things start looking very depressing. Anyone who visited the Soviet Union will know what I mean.
Chinese apartments concrete smell
Inside an apartment, you find garish light fittings, what appear to be fine modern leather lounge suites, and tiled floors; nice on the face of it if you like that sort of thing—and in China face is everything. The bathroom though is the room with the least thought put into it. They are generally cramped and crap. All the plumbing is plastic pipe fixed to the wall, bent and angled in hap-hazard manner; I’ve seen better plumbing in a 1950’s fibrolite Kiwi beach bach. Also, one of the first things you’ll notice is the damp smell of concrete. Concrete, being porous needs to be sealed. But not here, it is simply painted over; I’ve not seen one apartment with ‘Gib-Board’ on the walls or anything covering them but a single coat of cheap paint and a cheap print. The apartment’s smell intensifies on laundry & shower day (yes, shower ‘day’ for a lot of locals). The washing machine is often in the bathroom; its drain-pipe joins the shower run-off, which flows –hopefully - down a 100mm wide concrete or PVC pipe. This pipe is shared by every other apartment’s’ occupants. The ammonia smell that rises from this pipe is eye-watering. Literally.
From light switches that spark, to grease-laden kitchen extractor fans, to paint falling off the walls, to sinks and baths and benches that aren’t sealed … these places are rubbish – even the new ones.
How does this happen? Why don’t people do something about it?
A number of reasons as far as I can tell.
1. Developers. Developments do not progress as they do elsewhere. Here, an architect simply draws the building cookie-cutter style, based on the best-selling book, “Tall rectangles for grown-ups.” He doesn’t attach his name to its finish quality. He simply does the pretty pictures and then hands over the drawings and flees.
From there the developer commissions huge hoardings surrounding the immense site that show the most absurd impossibilities like grassy fields, and blonde American families skipping through meadows. The Chinglish is fantastic though and keeps me entertained, some of my favourites (all true):
“Windsor Castle: Lush - Family, Meadow, Life, Child, Landscape, Drunk.”
“Chateaux Palace: Brilliant, Today, Relax, Love, Pragmaaaaasticks.” [WTF?]
“Paradise: Beach, Puppy, Dance, Live, Double-Nice.”
Anyway, the developer (meaning Communist Party member with special loans & power ) gets the construction company (meaning Communist Party members with special deals) to forget about the pretty pictures and get the job done. The former suddenly forgets about all the promised pre-sales, after-sales service, and maintenance. The latter buys materials which are a lot cheaper and dodgy than spec, and/or doesn’t finish the fit-out due to being a complete bastard for whom reputation is unnecessary. More often than not though, it is because the new owners ask to do the fit-out themselves—either to save money, or because they have low expectations of quality from the builder I don’t know—but either way it’s a shambles. Added to that is, as an owner, even if you wanted to do something about a breach of ‘contract’ the chances of getting any kind of result apart from an emptier wallet are remote at best; getting physically threatened is a much more real possibility.
2. Landlords. Now this goes for commercial and residential. All rent for a year is paid for in advance. Unless demented by Chinese standards, the landlord takes no responsibility whatsoever for the upkeep of fittings or internal structure. For example: your plumbing stops working because the pipes on the wall are poorly fitted or blocked, responsibility? Your responsibility. The light in the ceiling falls to the floor? Your responsibility. Burning gas burns down your kitchen due to poorly-fitted gas work … responsibility? You guessed it. Yours.
There are rental agreements, but seldom do they say anything about who pays for what; and even if it does it is presumed that it is always the tenant who pays.
3. Commercial. Same deal on the rent paid up-front. There is once again, as far as I can tell, no contractual responsibility assumed by landlords to conduct maintenance on commercial buildings, nor agreements between the parties as to usage rights, maximum people flow etc.; this leads to vast under-capacity of lifts and toilets, and outrageous fire risks. Again no one seems to care or even give it any thought; and the idea of making a rectification complaint to the landlord is ludicrous and down-right rude; once again he might lose face you see – geez, he may be a government man or at least he must have government connections otherwise he wouldn’t have been able to own it in the first place.
If a commercial tenant does have a notion of maintaining their brand reputation and invariably find the building crumbling around them, they simply move out to a newly built building down the road. The banks (all government entities) do this on what looks like a daily basis. This leaves empty, rotting buildings all around town; including very large shopping malls.
Government buildings on the other hand are grand. By this, I don’t mean nice: I mean maintained, landscaped, looked after etc. This is unusual. And by government building I don’t mean “a building containing a branch of government.” I mean “a building containing members of the government.” Sometimes for example you’ll see a government school next to a government building; not often however, but with no sense of irony the school will be rough as guts, with open trough toilets and shabby facilities. Not so however for the ‘chosen-ones’, who will be well ensconced in lavishly large offices,with flowering gardens, underground car-parks, and fully earthquake-proofed ivory towers.
This last is important.
Ai Wei Wei, the once in-favour artist & designer of the ‘birds nest’ stadium in Beijing, is now a Party enemy for being bravely vocal about the Sechuan earth quake tragedy, pointing out how government buildings remained standing while government schools collapsed killing nearly 20,000 kids.
The amount of capital being blown here in China is just mind-blowing. More so, because just a few years ago there was no capital here to blow. It has accumulated, and could go, with equal speed. With no maintenance of capital goods and a hopelessly misallocated capital structure; with a construction boom that dwarfs even the most recent one in the US; with endemic and systemic corruption; with cheap and highly risky loans; with a government too frightened to accept or to tell the truth; with all of that  the chances of a very loud and very calamitous popping of this bubble is even more certain than a Muslim protest at a cartoon of Mohammed.
And for all of that you don’t even get a nice aesthetic. Everything here does, or will, look like shit.
Shanghai collapsed apartments
TO SEE UP CLOSE for myself what malinvestment and capital destruction on a massive scale looks like, I took a jaunt recently to a small ghost city, it is situated in the middle of a barren wasteland about 70 Km's from anywhere. There was barely a soul to be found except for me and a lone, rather stunned, security guard.
If you look closely, you can see me and my motorbike at the base of a new and completely empty, very  large government building.
Opposite there behind the camera I'm looking at an equally large Police station that outside has a single cop car; again, not a soul around. There is also a man-made lake. With nobody on it.
If ever a decent new series of The Prisoner were filmed, this would be the place to come. A captive Patrick McGoohan would be right at home here.
I'm trying to paint a picture of what it feels like there but it is hard. Try and imagine the worst waste land you've been to and imagine a resort being built there.
And this is when they’re trying to build nice.
In conclusion, here’s an ostrich. (Did I mention China is insane?)

[Pictures by Suzuki Samurai, AP, Sulekha.Com]


  1. This echoes my experience in China. They buildings are really cold and every year seems to add a decade to their age.

    On another note... there's a shipload of quality (really important) content on the blog at the moment.

  2. The collapsed building doesn't appear to have any foundations. The dirt pushed up into the underside of the building indicates that they haven't just been bulldozed away, they were never there in the first place.

    Presumably if you were a tenant the repairs would be your problem. Tough luck if you were living on the eighth floor with views and suddenly find yourself on the ground floor living sideways. Going to the dunny could be tricky.

  3. Greetings Mr Samurai.
    A stunning report, the MSM should pick this up, or perhaps it would be better for a fine Japanese gentleman in China if they did not.
    Looks like facisim replacing communisim, more productive perhaps, but not the rise of capitalism we have been hearing about.
    Buildings to satisfy the dreams of polititians, planners, and their chosen builders, not land owners to accomadate productive tennants. This could not happen under N Z's system of property rights and capitalism.

  4. Ken wrote:

    "This could not happen under N Z's system of property rights and capitalism."

    Hmmmm, you're not from Christchurch, are you?

  5. And yet, when it comes to business, to real economic freedom China is far far ahead of NZ!

  6. It has distinct echoes of Taiwan and South Korea in the 1970s - where department stores and apartments would periodically collapse. Both countries at the time being run by dictatorships, but which didn't necessarily stop protests or attempts for redress, except most property development was underdone by those with connections to the regime.

    Both countries have grown up and this is unheard of now, but then they both threw off the shackles of their dictatorships in the late 1980s.

  7. Building crap buildings that only look good in the first year. Isn't that typical of many developing countries?

    I lived in Jakarta for 2 years a decode ago and what is described here sounds very similar.

    Often I lamented about what the Chinese could achieve if they just did things right. Same effort but better outcome.

    Look at all the crap being produced in China. Often you look at it and realise with just a better material choice and slightly more attention to detail and their product could be as good as any.


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