Re:‘China’s Manhattan’ Borrowed Heavily, but the People Have...
by Barrin92 on Thursday April 11, 2019 @03:34PM
(#19638301)
>Short story is some developments work, others don’t
This is the key point because the goal of these (over)-ambitious projects never was 100% allocation efficiency. It's much more comparable to the era of America's railroad tycoons than it is to economic development as we're accustomed to.
There's a relatively huge degree of waste, corruption and whatnot, but the goal isn't efficiency, it's effectiveness. Through these projects, even if a portion is ill-conceived, China is able to rapidly urbanise, avoid many of the pitfalls in regions with more incremental approaches, and also builds construction and planning knowledge (this one is very important) and finds a pathway for its export surplus.
It's the same approach China has taken to its tech industry. Is a lot of funding going to bogus projects? Yes, but they can afford it, and even if only a fraction pay off they'll consider it a win. Is it slightly mad to treat building a city like a VC investment? Sure, but then building company towns and new settlements and railroads seemingly randomly through a country was as well. And yet, when it works and it creates one new hub of innovation, it pays a hundred times over.
This is the key point because the goal of these (over)-ambitious projects never was 100% allocation efficiency. It's much more comparable to the era of America's railroad tycoons than it is to economic development as we're accustomed to.
There's a relatively huge degree of waste, corruption and whatnot, but the goal isn't efficiency, it's effectiveness. Through these projects, even if a portion is ill-conceived, China is able to rapidly urbanise, avoid many of the pitfalls in regions with more incremental approaches, and also builds construction and planning knowledge (this one is very important) and finds a pathway for its export surplus.
It's the same approach China has taken to its tech industry. Is a lot of funding going to bogus projects? Yes, but they can afford it, and even if only a fraction pay off they'll consider it a win. Is it slightly mad to treat building a city like a VC investment? Sure, but then building company towns and new settlements and railroads seemingly randomly through a country was as well. And yet, when it works and it creates one new hub of innovation, it pays a hundred times over.