Wednesday, February 5, 2014

What Has the Dry Bulk Fleet Been Carrying?

This article about Tianjin construction was from a year ago, but still!:

"'Our goal is to create the world’s largest financial center, right here, within ten years,' says Lin. 'We're building skyscrapers, we've got China's largest high-speed railway station coming soon, we're building a tunnel under the sea, and we'll soon build several subway lines.'

Li sounds like a boy whimsically building sandcastles. And this is a very big sandbox. The city's called Yujiapu. It's now one of the biggest construction sites on the planet. Workers are completing dozens of skyscrapers, many over 50 stories tall."
It's a "planned Manhattan" - as though you can create a new center of commerce by fiat. Construction photos:

So, this is what the world's dry bulk ships have been carrying. Raw materials for useless boondoggle cities.

Cities develop organically. It doesn't work to just plop a dozen 50 story high rises somewhere and call it a major financial center.

A correspondent writes in,
"The Chinese and ther leaders have a cargo cult understanding of infrastructure. None of the infrastructure they build has any relation to capital formation."
Chinese cargo cult behavior is something we've talked about before,
"Alas, the Communists saw absolute power as a mere stepping stone to their true goal: Mimicking a few random characteristics of advanced economies, no matter how many lives it cost."


Taylor Conant said...

Comments, unedited:

Think about how absurd it'd be for china to pay its slave commodity miners and laborers to construct high density cities for them to live in. There are no economic benefits to expensive skyscraper dormitories for those kinds of workers. So what do they do? They build financial centers because it seems less absurd to have a bunch of paper traders living in close proximiry. But then think about what THAT implies Finance in a non market economy isn't a productive activity. It is literally paper shuffling back and fortg created by the inflationary frb process Why do they need so many people living together making bad loans? Manhattan is a global financial center and even there not everyone works in finance China is building a Manhattan for itself and filling it with financiers? Are they going to print that much money for them to trade back and forth? So what is the end game for the Chinese? What happens to their labor force when they run out of cities and high speed rail Start a war to get rid of them/them and start over from scratch?

Anonymous said...

So the knowledge that China is bogus is spreading. Trotskyite communist cargo cultists will be the last to know. Maybe you can figure a way to make them pay for their ignorance. Eventually, when China melts down, everyone will understand the brute fact that China has melted down. Until then, you have a chance to make a profit from the slow diffusion of understanding.

CP said...

Great commenters!

Taylor Conant said...


What do you think is the best (and safest) way to make a buck off China's demise?

CP said...

It will be a 2008 collapse if the China mirage goes away. So the question is, what leverage sector has the lowest implied volatility put options available to buy?

Mining? BRIC index funds?

The world is your oyster.