Bad debt puts brakes on building towards capitalism in China

CHINA:   construction boom rages in China but the empty shells of failure are to be seen everywhere, Mark Godfrey reports from…

CHINA:  construction boom rages in China but the empty shells of failure are to be seen everywhere, Mark Godfrey reports from Beijing

The Zhongzhou Island shopping mall is one of many white elephants in China. Were it in Europe, this building in the heart of Fuzhou would be known continent-wide for its sheer scale.

Sitting on an island at the centre of the Min Jiang river, the massive complex is a pastiche of famous European buildings on China's southern coast.

Painted in the pastel colours of the finest stately architecture of Baltic European cities and mixing a hodge-podge of Europe's most famous gothic buildings, the extravagantly proportioned complex is framed by spacious walkways and riverfront café spaces lit at night by municipal floodlights and garish neon.

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Outward harbingers of bad taste aside, on closer examination the building's qualities are certainly not the product of 18th-century European master craftsmen.

Paint peeling from the lions which sit atop the pillars in the riverbank wall reveals lumpy mass-produced plaster-casts. A misplaced foot on a window balcony meanwhile has sent a huge chunk of ceiling onto the paving stones outside.

The ceiling here is of thin plasterboard. The lifts haven't been installed, their huge skyward skeletons rusting now, before builders had the chance to finish the fitting and plaster over the metal.

Zhongzhou was intended to be the European shopping experience of southern China, with glossy computer-imaged projections of ferry boats coming up the Min Jiang to unload passengers at its salubrious docks.

The well-dressed shoppers in the prospectus are helped up the gangway by stewards in bell-hop uniforms. Today, bits of steel, wood and electric cable litter the ground underneath the buildings grand arches through which the shoppers were to walk. The pair of security guards out at the gate have a hard time preventing scavengers picking up the remaining pieces for scrap.

An ageing couple sells fake silk ties every evening under one of the dozen arches on the building's south side. Locals come to stroll the promenade and to enjoy snacks and fairground amusement games on the tile pavings around the building.

"Every few months we hear a new rumour," said the bowtie sellers. "It'll open in one month, it'll be opening in two months, they say."

An overseer sat in the lonely, messy salesroom, his feet up on a desk, snoring. Glossy prospectuses lay in piles on haphazard desks. "It'll be opening in December," said one of the attendants who rushed over from a food stall she was manning.

The Singaporean investors who built Zhongzhou appear to have vanished. At least there's very little evidence of their presence or persistence about this central piece of Fuzhou real estate and no one is able to put a name on them.

Reckless property ventures and failed business ventures are not uncommon in China's enthusiastic reacquaintance with capitalism. But follies like Zhongzhou island weigh heavy on China's banking sector, though not as much as the raft of stuttering state-owned enterprises which the government, fearful of unemployment and social unrest, is unkeen to park.

The property sector has made most of China's millionaires but the bad apples have caused China's banks to suffer from the world's worst burdens of non-performing loans.

The European fairyland of Zhongzhou is one of the most extravagant, but still only one of many such shells visible across China. Several similarly abandoned buildings are sprinkled across Beijing.

At the busy Luliqiao junction on Beijing's south-western axis, a handsome cylindrical skyscraper of glass is ring-fenced by blue boards, the grey-green glass of the two-dozen floors dusty now but the granite still shimmers in the sunlight. On the other side of the city, the massive unfinished office block complex in Sanlitun looks grimy by comparison.

Idle now for over a year, this is the type of place where urban action films are best shot, a hulking giant that sits in the city's embassy district, scaffolding still clinging on to the mortared bricks.

Nobody seems to know who owns either project but local newspaper sellers talk vaguely of disgraced tycoons, corruption and cash running out.

Skyscrapers jut into the sky ever taller and more adventurously in all of China's major cities. China lists more frequently than any other country in rankings of the world's tallest buildings.

The country's tallest building, the 420-meter-high Jinmao Tower in Shanghai ranks as the world's third-tallest. Plans for new buildings in Beijing and Shanghai will see the Jinmao eclipsed before Beijing's constantly heralded staging of the 2008 Olympic Games.

US developer Johnson Fain Partners has been given the license to build a new business district in Beijing which will include at least 55 skyscrapers. The envisaged twin towers of Beijing International Trade Centre meanwhile will compete with the 460- meter-tall Shanghai World Financial Centre to become the world's tallest buildings if they're completed as planned.

Apart from the banks, the biggest losers from China's craze for massive scales are often the labourers who toil on their construction. Most go unpaid when a project collapses and mini-protests by penniless workers have become as commonplace as media reports detailing migrant workers going months without a pay cheque.

An apartment block opposite the Zhongzhou complex in Fuzhou looks like a sugary imitation of a row of houses in central Madrid. There are no windows yet in most of the apartments. There are lights on in three however. Some well-worn clothes hang on a makeshift clothes line.

Construction workers in China tend to live on construction sites or in nearby huts, usually with their families. Many have no option but to stay on when building projects collapse, waiting for pay or for fresh work.

They could never dream of living in such an address but gazing over imitation domes and a Venetian tower out over the Min Jiang river these labourers can dream of what life was supposed to be like in Fuzhou's European paradise.