Advertisement
Business

Amid poverty, Chinese officials splurge on lavish vanity projects

There are no highways running through this impoverished rural county. Children study in dilapidated schoolhouses. On many streets, you’re just as likely to run into a chicken as you are a pedestrian.

Yet the Wangjiang local government is constructing a headquarters on a slab of land the size of the Pentagon building — a sprawling edifice of granite and glass with a $10-million price tag in a county where the average resident earns $639 a year.

“The government building is so grand, but at the same time, many people are still living in poverty here,” said Ye Daoman, a local farmer and activist.

It’s a common phenomenon in China. Like teenagers with their first credit card, local officials armed with cheap state loans and money from land sales are splurging on lavish projects of dubious value.

Advertisement

In growth-obsessed China, officials’ careers are judged by how well they meet development targets set by Beijing. The easiest and fastest way to juice growth figures is to borrow money and build something. The grander the edifice or attraction, the thinking goes, the more authority it projects.

But these big-ticket baubles are often located in backwaters that lack decent healthcare, education and housing.

Take the poverty-stricken county of Dancheng in central Henan province. Officials there spent $1.3 million on a sightseeing rail line with a replica steam-powered train, although there’s little to see but farmland. The locomotive overturned on its first day in operation last year. It’s now sitting idle at a park.

In the remote city of Ganzhou in southern Jiangxi province, officials splurged on a $45-million mechanical clock tower touted as the largest in the world. But so far there have been few visitors; officials haven’t finished paving a road to the site.

Advertisement

“There’s nothing to see,” said one local travel agent. “It’s just a building. You can see it but you can’t go inside.”

Because local governments are forbidden to borrow directly from banks, they typically finance projects through off-the-books investment companies with little oversight. Deals often involve sales of public land to these entities, an easy way for dishonest officials to enrich themselves, experts say.

“When there’s no projects, there’s no money,” said Zhou Xiaozheng, a professor of sociology at People’s University in Beijing.

“The key behind this is that they always get kickbacks,” Zhou said. “There’s always corruption involved.”

These so-called face projects have proliferated since the 2008 global financial crisis. Spooked by a slowdown in China’s export sector, the central government stimulated the economy with easy credit and encouraged development of homes, commercial buildings and infrastructure to keep millions employed.

Borrowing exploded: Local governments now owe $1.7 trillion. Central planners say the figure is manageable, but skeptics warn of a brewing crisis.

“Our version of the U.S. subprime crisis is the lending to local governments,” Cheng Siwei, a former legislator, said at the recent World Economic Forum in the northeastern city of Dalian, state media reported.

One result may be a nationwide explosion of bad taste. Taking their cues from the Beijing Olympics and Shanghai World Expo, lesser-known locales have gone on beautification binges that defy explanation outside Las Vegas.

Advertisement

Earlier this year, a small city in central Anhui province announced plans to spend more than $44 million on a hotel designed to look like a pingpong paddle.

The Funing county government in eastern Jiangsu province spent $7 million on a park and ersatz Sydney Opera House that houses a hotel and restaurant. Think iconic white “shells” slapped on top of a large brick box — and no opera.

China’s central government has railed publicly against wasteful municipal spending and the malfeasance that goes with it. But so far it has done little to stop it.

Chinese citizens are now fighting back on the Internet, posting photos of the most extravagant government offices. Plans for a Communist Party cadre school shaped like a hammer and sickle were scrapped in Anhui this year after a local micro-blogger leaked word of the project online.

It was an Anhui journalist, Bin Yu, who exposed the mammoth government building in Wangjiang, one of the neediest counties in one of the country’s poorest provinces. Bin declined requests for an interview. He served a 10-day jail sentence this year for “disturbing public order” after reporting on a forced eviction of residents whose homes were demolished to make room for new development in Hefei, the provincial capital.

Today, the unfinished husk of the Wangjiang office complex rests like an abandoned movie set on fertile fields once used to grow cotton and rapeseed. Residents said construction had slowed after the project gained national attention.

“Customers always talk about why that thing is so big,” said Zhou Jieyong, 49, whose home and restaurant sit across from the imposing building’s front gate, separated by an algae-choked creek. “That used to be good arable land.”

The headquarters is being developed by the Wangjiang County Urban Construction and Development Investment Co., a group that’s technically private but is headed by a cast of county officials. It’s unclear how much debt the entity has taken on. Repeated calls to the head of the county government and the county’s Communist Party chief went unanswered.

Advertisement

Residents say largely agricultural Wangjiang, which is home to 600,000 residents, is starved for industry.

Locals like Xu Guangya don’t even have farming to fall back on. He and hundreds of others were evicted from their land to make way for a redevelopment zone anchored by the government office. The 40-year-old vegetable grower said he was denied compensation and the rights to a replacement home. He and his wife have been living off their savings.

“My wife has already gone to Beijing to petition our case,” Xu said. “I keep petitioning officials here, but they tell me it’s like trying to fight the sky. They say, ‘Give up, you’re just a farmer.’ ”

david.pierson@latimes.com

Kaiman is a special correspondent.


Newsletter
Get our weekly Business newsletter

A look back, and ahead, at the latest California business news.

You may occasionally receive promotional content from the Los Angeles Times.
Advertisement