Poor value

Fuyang’s very own White House: a wise use of taxpayers’ money?

If emperors have all had one thing in common, it’s the tendency to bankrupt the national treasury by building luxurious palaces and monuments.

Left unchecked, city and provincial government officials throughout China have a similar fondness for ill-conceived building projects. It’s a problem that top leaders in Beijing have found particularly hard to tackle.

Speculators like Jim Chanos have called the phenomenon ‘malinvestment’, but irate netizens simply call it outrageous. One of the most recent cases to come to light is the nearly $3 billion sum that the city of Wuhan is spending to commemorate the centennial of the 1911 revolution that turned China into a republic. Never mind that the date of the uprising is more often celebrated in Taiwan than in China. Wuhan was where the fighting broke out, and local officials are determined to build a series of ‘cultural areas’ devoted to the event.

The irony of spending billions to commemorate an uprising against imperial rule was not lost on one internet commentator, who called it an act worthy of an emperor. Wrote another: “The best memorial for the 1911 revolution is not burning Rmb20 billion or lighting a few fireworks, but helping China’s 1.3 billion people live a life of dignity so that the democratic China pursued by those dead patriots comes true.”

The country is littered with similar controversial projects. Last month local media reported on a luxurious villa-like primary school in Zhangjiajie, Hunan, that cost the local government nearly $6 million to build. “[That’s] usually enough to build 200 primary schools,” observed the New Express.

At least a school, however expensive, confers some social benefit. There’s not much that can be said for the $300,000 gold-plated statue erected in Henan or the massive $71 million boulevard the size of Beijing’s Chang’an Avenue constructed in a tiny Hebei town.

Paradoxically, officials in towns with grinding poverty seem especially susceptible to delusions of grandeur. Funing, a poor agricultural town in Jiangsu, is reportedly going ahead with plans to build a $150,000 replica of the Shanghai Expo’s Chinese pavilion. “Residents here can’t afford a decent life but the government poured money into a symbolic project that won’t benefit people,” a frustrated local resident told the Global Times.

Local officials in China are judged largely on their ability to meet GDP growth targets and otherwise have leeway to undertake schemes that take their fancy (consider the example of the local government in Fuyang which built a replica of the White House to use as its office, see photo). That lack of accountability has led to significant waste on the construction of grand designs. Some of the better known examples of official hubris are the ‘ghost towns’ – failed attempts to remake entire cities. In Erdos, Inner Mongolia, officials contributed greatly to local GDP by building a new (and unnecessary) town just 30 kilometres away from the original. It’s still lacking people.

A similar project in impoverished Qingshuihe County had to be abandoned for lack of funds. County officials seem to have budgeted to spend $900 million despite only having an annual income of just over $4 million. Half-finished buildings stand now as Ozymandian monuments to their ambitions. “Since the government got busy constructing the new district, the reconstruction of the old town has been lagging behind,” one local complained to the China Daily.

Beijing has tried to clamp down on the practice by telling banks to stop lending to local government vehicles, but officials are experts at finding loopholes. One county on the outskirts of Shanghai financed its real estate schemes by spending the $290 million Beijing had paid it to build a high-speed railway, according to the 21CN Business Herald. It looks like the country’s ‘little emperors’ are still far from being dethroned.

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