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Angola, China: Netizens Discuss New Development Ghost Town

Like many African countries, most people in Angola hardly earn $2 a day. The government of Angola took a step in trying to develop the country such that it could match other countries in the world. This time it selected developing apartments in Kalimba, about 30km outside Luanda, the capital.

The government hired a Chinese company, China International Trust and Investment Corporation to do the job and it paid back by giving it the country's natural resource, oil.

The new apartments at Nova Cidade Kalimba. Photo courtesy of constructiondigital.com

The Chinese company did the job pretty well and built 750 8-storey apartments where each apartment would go for 75000 Euros a price that cannot be afforded by locals even in 20 years.

Blogger Francois-Xavier thinks the government had to use oil to develop local industries, which would provide employment for citizens:

Or how the exploitation of Africa’s natural resource benefits only banks and multinationals! Its quite a shame for an African government to go for such a move. Oil and natural resources revenues must be used to develop heavy industry, the main engine of any economy and which is sorely lacking in Africa. This will allow access to employment and a fair redistribution of wealth and thus increase the purchasing power of brave Africans. Africans are not needy for luxury. That’s a sheer lie that is being publicized by western corporatist media working with the tiny yet heavily corrupted African elite.

Talking about the price of the apartment, he says:

That will take 20+ years to a man that has a wife and 4 children to pay up. A crazy one will ask:”Why does he have 4 children?” and I will answer him “Go to h***”. Do not drag Africa in your crisis spiral.

This is Africa tries to explain why there are ghost towns in China and Angola:

It would be easy to condense the real reason for this craziness into one word, namely: “Communism!” – or maybe four words: “Communism and Marxism-Leninism” – considering that the one-and-only ruling party in the People's Republic of China is officially committed to these socio-political ideologies, but my gut-feeling tells me there’s more to this weird phenomenon of building cities well in advance than meets the eye.

History has proven that in almost every single country in the world where revolutionary socialist movements have taken root, and more so when the people are ruled by a one party state, that there is always a massive misallocation (legalized theft) of capital by the ruling government.

So what are these ‘Masters of Darkness’ planning now with the numerous, largely uninhabited, structures that are popping up in strange remote places, mainly in countries controlled by communist forces? These new cities with their tarred roads, patches of green lawn, and neat rows of apartment blocks surely cannot be for the benefit of the working classes, as the cost of purchasing an apartment in any one of these new developments is well out of reach for the average working-class family. The communist manifesto that claims, “…we represent the interests of the working classes,” is thus complete and utter bullshit!

UChinaTravel blog writes:

It is believed to be one of the largest new building projects on the entire African continent.

However, the reason this story received so much attention is the fact that the new development has been portrayed as a “Ghost Town,” as almost all 12,355 acres of the property are seemingly vacant. Nearly an entire year since the first round of 2,800 properties hit the market, only 220 have been sold.

Fauna posts translated Chinese comments from Chinese netizens on chinaSMACK website. Below is a sample of the comments:

Those bunch of stupid losers have hyped/speculated the housing market all the way to Africa?

[Head of Chinese Academy of Social Sciences's Africa Research Office] He Wenping says, “This a construction project that benefits everyone, as well as the foundation for African economic growth”. == Sounds familiar!

Domestically [the country] keeps trying to tax us and raise the retirement age while squandering money abroad!!! China, I’m proud of you, I feel such pride!!!

The residential area is meant to help improve the people’s livelihoods —— Whether that’s the case there I don’t know, but over here its used to exploit us [with usury]!

A bunch of unscrupulous businessmen who after cheating people out of their money in China have now gone to Africa to lose face for Chinese people.

However, one netizens disputes the use of the term “ghost town”:

BBC, this time you really have got it wrong, a “ghost town” according to China is a neighborhood where not a single person lives, and this new residential district in Angola no matter what still has a few people living there, so how can you guys say it is a “ghost town”????

Will the Angolan people be able to access these apartments that were constructed using the country's money and natural resources?

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3 comments

  • Cleo

    When the Americans do it, they are “filling a gap.”

    Hola, Mormons!

    http://online.wsj.com/article/SB10000872396390443720204578004243238970954.html

  • […] Luanda, where a Chinese company hired by the government started building what will possibly become Africa's biggest ghost town due to the high price of the estate that the majority of the population cannot […]

  • samir sardana

    Re the Chinese Ghost Towns

    Let us assume that 30 million tons of steel,was used in the so called ghost towns,15 years ago.After 30 year. when these buildings are replaced,this will be steel scrap,and its price will be double the price.of prime steel today.The cement is a dead loss.

    But let us dig deeper.Bao Steel may bill steel to a builder,at say,200 usd/ton,but the Marginal cost of that steel,might be 100 usd/ton.This is not enough.The Marginal COST To the steel cluster,in a communist nation would be 15-20 usd per ton,as the coal mines and steel factory,ports,rails,roads etc.,are already in place.The difference between the coal tarriff and the marginal cost of coal is a TRANSFER PAYMENT FROM Bao steel to the coal mine (if Bao is buying Coal)

    If Coal is selling at 50 usd/ton,the Marginal Cost would be 4-5 USD (being cost of power,diesel and cost of variable labour).

    So the MARGINAL COST of the Ghost towns,would be 10-15% of the contracted value of the towns.

    At that time,it was the RIGHT decision to set up these “ghost towns”,as the price of steel,coal,cement,paints,labour etc., was much lower,and so was their marginal cost.It made sense to lower the ENTIRE PRODUCTION cost of these plants, by MAXIMISING production,and then using the production,in so called GHOST TOWNS.The benefit of lowering the ENTIRE PRODUCTION cost of the steel,coal,cement plants,would be in the billions of USD.IF THE SAME INFRASTRUCTURE WERE TO BE SET UP AT TODAY’s PRICES OF steel,coal,cement,the cost WOULD BE MUCH HIGHER (far beyond the accrued Chinese Inter bank interest rates over the years)

    As far as the banks who lent to the builders of these so called ghost towns – it is important to understand that the Banks have NOT funded the towns.The Banks have funded the input suppliers of these towns,id.est., the steel,cement,paints, furniture and appliances etc factories. In particular,the banks have implicitly funded,the profits of these input suppliers.

    Then we calculate the employment provided to a mass of labour in these ghost town projects,and its attendant benefits and the management and technical expertise,developed by the builders,in these ghost town projects.

    It must also be noted that the INCREMENTAL PROFITS earned by the steel,cement,paints,furniture and appliances etc. factories,as suppliers to the builders of the ghost towns – would have in the last 15 years,based on a ROCE of 20-30 % ,yielded an aggregate return of 1000-1500% to date (with the attendant revenue streams to the PRC,in the form of direct and indirect taxes,besides other incidental gains)

    Hence,for a Communist nation,the Marginal Cost for the Cluster of the “Ghost Towns” (which includes the downstream supply chain benefits and the benefits to the state) is very low and MIGHT even be NEGATIVE,based on the Marginal Cost of the CLUSTER.

    If the PRC calculates the incremental gains to the steel,cement,paints,furniture and appliances etc. factories,and their staff,over the past 15 years and the revenue earned by the state from this chain,over the last 15 years,the gains per se, could more than bail out the bank loans,to the so called ghost towns

    IT MUST BE NOTED THAT THE LABOUR USED IN THE GHOST TOWNS,AND THE LABOUR USED (IN PART),IN THE INPUT SUPPLIERS,TO THESE GHOST TOWNS – would have had NO OTHER employment,were it NOT for the Ghost town projects. These millions of labour were introduced into the labour pool,ONLY due to these Ghost Towns.Of course,they would have inevitably entered into the labour pool – but only after 5-10 years (on such a large scale).

    Hence,there is no loss to the PRC,on account of these so called “ghost towns”.

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