investigation into China’s economic growth recently aired in Australia on a current affairs television program called Dateline. This investigation uncovered some startling evidence that suggests that China either overestimated the rate at which their economy would grow, or is artificially stimulating the economy to encourage growth. What China is allegedly doing is building commercial properties and entire suburbs of residential dwellings at an alarming rate in anticipation of the future growth that will enable more Chinese people to purchase their own home. The problem is that there is still no demand for the millions (yes, millions) of properties that are being built – and likely never will be. One analyst estimates that there currently around 64 million empty apartments in China. You see, what the Chinese government is achieving by building all these properties is a growing GDP. Regardless of whether the buildings are occupied, the actual process of building generates jobs and uses resources that make the economy appear to be in a much better position that it is in. According to the dateline story titled “China’s Ghost Cities” there is even a massive shopping mall called South China Mall that remains virtually empty. The transcript of the story reads:
“The majority of this vast shopping centre remains as empty as it did when it opened six years ago. Back then, developers boasted that it would become the world’s biggest shopping mall, with plans for 1500 shops that would attract 70,000 shoppers a day – the mall was heralded by the New York Times as proof of China’s astonishing new consumer culture. But today, the not so great Mall of China, as it is known, is a glaring indication that this consumer culture has been grossly overestimated.”
I’ll leave you to make up your own mind about what this means for the future of the Chinese art market boom and the general direction that the art market is heading. I know what I think.
To see the dateline story about China’s economic growth go here:
**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications