The Prince of Risk A Novel(63)

The basis of the remarkable leap forward was the creation and development of an export-based economy. Cheap Chinese labor lured foreign corporations to manufacture products at an advantageous price. These corporations invested in factories and exported their products to the rest of the world. Housing, primarily in the form of towering apartment complexes, was built to provide lodging for the hundreds of thousands of peasants fleeing the countryside to earn a living wage. Roads were laid to transport raw materials to the factories and finished goods to market. Ports were expanded to enable more and larger ships to take on merchandise. New airports followed. Power plants were constructed to generate and distribute electricity to the rapidly expanding industrial base. Cities like Guangzhou, Shenzhen, and Chongqing exploded, moving from forgotten backwaters to industrial dynamos.



As the country prospered, its citizens enjoyed a rising level of income. In financial terms, per capita income skyrocketed from $300 per year in 1987 to $3,000 in 2012. Gross domestic product, a measure of the country’s economic might, increased 330 percent, at an annual rate of more than 12 percent. (In contrast, over the same period, America’s GDP increased a mere 60 percent.) The populations of Shanghai and Beijing doubled. By 2012 there were 160 cities boasting more than 1 million inhabitants, 35 cities with over 3 million, and 9 urban conglomerations counting more than 5 million people. Shanghai and its suburbs alone were home to 23 million souls.

But instead of spending freely and buying consumer goods—and as a consequence building domestic demand for their own products—the Chinese saved. The Chinese had always demonstrated a maniacal desire to own property and gold. These savings were held in the form of gold coins and bullion or invested in residential real estate. The government stopped being the principal builder of housing. The private sector took over.

The pace of construction accelerated. Banks flush with cash generated by the country’s burgeoning export industry could not make loans quickly enough. Regulation over lending practices was scant, and more often than not overlooked. Speculation was a national pastime. Apartments were purchased as soon as they were built. Investors, many of whom had been farmers or peasants a few years before, flipped properties at a dizzying rate. Values skyrocketed. Simple apartment complexes gave way to larger residential developments, and finally to entire spec cities. By 2012 these “ghost cities,” urban conglomerations complete with homes, parks, storefronts, roads, sewage, even fiber-optic cable to deliver phone, television, and Internet services, could be found all over the country. In short, they had everything but living, breathing human beings.

And still the Chinese built.



The scale of the country’s growth was so enormous as to be unimaginable.

Easier to admire were China’s engineering marvels. There was the free economic zone of Guangzhou and Shenzhen, where hundreds of thirty-story apartment buildings stood as close to one another as soldiers on a parade ground on land that until twenty years before had been rice paddies. There was the Three Gorges Dam, the creation of which had formed a 50-mile lake and which counted itself as the world’s largest hydroelectric power plant. (Little was said of the more than 5 million peasants forcibly relocated with little or no compensation.) There was the Bird’s Nest Stadium, built for the 2008 Olympic Games in Beijing to herald to one and all the arrival of a glittering, technologically advanced, and thoroughly modern China. And the strangely futuristic Pudong district of Shanghai, with its weird skyscrapers topped by gigantic globes.

China’s most recent obsession was the drive to construct a high-speed rail network connecting the nation’s largest cities. In one frenzied year, the Chinese succeeded in laying 800 miles of rail between Beijing and Shanghai, reducing travel time from nearly a day to five hours. By 2015 a national high-speed rail system running the length of the eastern seaboard from Guangzhou to Dalian, with spurs to the mammoth and largely forgotten cities of the inland, would be complete.

But as Longfellow declared, there were cracks.

For every benefit of prosperity, there was a cost. Smog and pollution were rampant. Beijing laid claim to having the world’s worst air quality. On a recent day, the particulate count had risen to ten times the maximum level deemed safe for human respiration. Visibility routinely dropped to 200 yards, with the sun hidden behind a dense yellow cloud of muck. It was not uncommon for five hundred people to drop dead from respiratory distress in a single day. In Hong Kong, one of the world’s most scenic harbors, pollution from coal-fueled power plants to the north cloaked the island in a noxious cloud so thick it was impossible to see Hong Kong Island from Tsim Sha Tsui, only 500 yards across the water.