The situation in China is explosive on many fronts. A major concern is the oversupply in commercial property. Business Week reports that 55% of Beijings office space is vacant. There is a "massive amount of oversupply" says Jack Rodman, an investor and speculator.
The report points out that last year $1.4 trillion in loans were made , no doubt to developers like Rodman, overwhelmingly for skyscrapers and office buildings. There is not an abundance of decent homes in China. Food is not piling up in wherehouses because people are so stuffed they can't eat eat any more. What is piling up is empty buildings. The situation is a classic example of the anarchy in capitalist production. A development called The Central Business District in Beijing has a 35% vacancy rate yet authorities are planning to double the size of the project. Another complex near Tiananmen square, five huge office towers, are still empty almost a year after leasing began, the report adds. Is this the best allocation of resources? I think not and I think most Chinese workers would agree with me.
What insanity.
This problem, that of oversupply/overproduction, is an inherent problem of capitalist production whether it is fixed asset rental space or refrigerators. Capitalism produces more than workers can buy back as we are paid less in wages than the value our Labor power produces. But capital must be put to work. Capitalists, as Marx explained, are not misers. They are risk takers in the sense that they throw capital in to circulation in order for it to return to them in a greater quantity. Of course, the capital they possess is not theirs, it is stolen from the worker, it is the product of the unpaid Labor of the working class that is the source of this "greater quantity" and this alone.
But the allocation and distribution of capital, like any other aspect of production in a capitalist economy is in the hands of the small group of people who own the means of production and whose right it is under capitalism to accumulate capital and determine its usage and allocation.
Consequently, the process is a wasteful and anarchic one as evidenced by the constant crisis the system experiences. The housing crisis in the US, which is being followed by a similar crisis in commercial property, and the huge bubble in commercial property that exists in China at the moment.
The Chinese bureaucracy are moving to tighten money supply and are requiring banks to hold more in reserves in order to weather the storm that is brewing. The bourgeois economists always talk of soft and hard landings but for the richest in society there is no such thing; they weather these storms quite well; they actually profit from them.
The other danger such a situation presents is social unrest which is a common occurrence in China. The Chinese working class is huge and with a revolutionary history still fresh in the memory of many older Chinese. There is a social bubble also that will burst and has far greater consequences. It is a bubble when it busts, is a positive thing for working people, but strikes terror in tot he hearts of capitalists.
The crisis that began in 2007 has not left the playing field yet and there is more to come. Consciousness has changed throughout the world as the effects of the crisis hits home and movements to fight back are struggling to find their feet.
The insane waste and inefficiency exampled here with regard to China will only be ended when the capitalist economic system is ended and those that govern it and own its productive forces no longer do so. The allocation of capital or the surplus that our collective Labor produces will, under a democratic socialist world federation of states, be determined by those who produce and consume the necessities of human life. This is not utopia, it is a not simply a dream. It is a realistic view of what can be and what must be. It will be the first step to real freedom for millions of people.
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