The real problem with ghost cities and other forms of extravagant government investment is that the economy can not support actually filling up and using those ghost cities and other improvements. The workers simply don’t earn enough money to pay rent, support city government including schools, and live a decent lifestyle. The country is better off if hundreds of millions of people continue to live in rudimentary agricultural districts. Think about it. What if Obama’s stimulus program included building hundreds of thousands of housing units in Detroit and then allowed low income people to move into them. How could that arrangement ever be afforded? China is about to find this out.
If China regulates higher wages to make everything affordable for individuals, manufacturing facilities will move to other less expensive countries and conditions will worsen. If China pursues a higher technology manufacturing policy, then fewer people will have jobs to even dream of living in these new ghost cities. Building these cities was the easy part. Putting them to use in a sustainable way will be the impossible part. Whew!
We shouldn’t envy the Chinese.
This isn't government investment - it's private sector investors plonking down cash on spec for condo units.