The most talked about country took the most unexpected turn against its best brand called Shanghai. Why?
Mega plans fueled with high growth and investments gave birth to high levels of kickbacks, commissions and arbitrage in the 90s. The average per capita income in China increased more than 11 times in a period of 30 years.
Every small rule by the party was followed by a plethora of unrest among the peasants, thanks to the Kleptocracy of the party members at all levels. In the late 90s the Chinese banks had around 35% non performing assets, which jeopardized the entire financial system.
Studies say that the Chinese economy was under severe recession despite the reports published by Chinese officials that it is attempting a soft landing. The recession peaked in 1999 where 80% of the provinces were under debt and the entire fleet of TVEs and cooperatives were suffering huge losses. It so happened that post 2000 the Chinese economy started growing again, like an uncontrolled rocket. During this time a certain group of leaders in Shanghai pledged to make Shanghai the picture of extreme imagination and flamboyance in one decade. Which other major cities of the world took centuries. This lead to one of the biggest construction project in East Coast of China the world has ever seen after the making of the Great Barrier Reef. This project increased the divide between the poor and the rich manifolds. In 1990s annual investment in the real estate in Shanghai was less than $120 million, in 2001 it reached $ 7.6 billion. While there were only three buildings in the city that exceeded 20 stories in height in 1980 and 152 in 1990, there were 1500 in 2000. This helped in the development of one of the biggest property bubbles in the history of China. The property market was catering to the nouveaux riches of the world. Widespread dissent acquired political tone because, in the eyes of the public it was at the cost of other parts of the country. The economy of the Coast was overflowing with public and private funds while the west and the north were not even getting their basic fundings. Many said that Shanghai was the ‘head of the dragon’. But the leaders of Shanghai were adamant enough to reopen the construction of the worlds tallest building, Shanghai Global Financial Center. Mayor Han Zhen was proud of this development and continued with all the big projects and even announced that Songjiang, Jiading and Qingpu will be developed as Shanghais suburb. It was also Jiang Zemin faction’s power base. So Hu Jintao, to control the investments in this area in the lines with macro-economic control. The center calcelled projects worth $48 billion including the 40 Km undersea tunnel, theme parks and horse racing tracks. The party leader in Shanghai were unappy with this move. Party secratary Chen Liangyu raised his voice and a conflict started which made the center even more determined to restrict the investments as per the national policy. chen is reprted to have said that ‘I have a dream’ against the lines of Martin Luther King (equality). He wanted Shanghai to achieve the levels by 2010 before the Shanghai world Expo. ‘Hai’ means beach and to make it, they imported 128000 tonne of sand to build a 10 Km long beach in the suburbs. He also commissioned a $290 million world class tennis complex and $300 million formula one race track. He crossed the limits when he announced the extension of the 30Km magnetic levitation train at a cost of $1.3 billion. This train was ranked in 2004 as the biggest white elephant ever made with payback period more than 160 years.
This lead to the widespread discontent against the Shanghai Gang and a major shuffle happened in the local government to restrict the gas filled property growth. This was the end of ‘The Shanghai Gang’. This is one of the few instances in the post independence that shows China cares for people and its the People’s Republic.
Rogues
