Volume CXXXI, Number 21 April 12, 2002 f

Watching the video in fast forward
RACHEL CONNELLY
FACULTY CONTRIBUTOR

This year I spent my winter break in Beijing, catching up on some of my research projects there. Even though I have been to Beijing many times, I am still amazed by the contrast in our economies as I move from here to there and back to here. In the month that I was gone from Brunswick, one old family-owned restaurant went out of business (Vincenzo's Italian Restaurant) Otherwise, the town was unchanged. And that is not unusual for Brunswick. There have been times when I have been gone for a year and would still only observe two or three changes down Maine Street and across the campus.

But Beijing is a different story. I left in July and returned in December. In that time, three entire neighborhoods, all within walking distance of our apartment, were destroyed. In their place are the biggest holes in the ground I have ever seen, and new temporary buildings around the fringes to house the construction workers. My kids were sad because there is a worker dormitory where the trampolines used to be in the park across the street. The construction workers assure us that the trampoline and playground will return when the building is finished later this year.

At the site of largest of the three holes, we were told that 30,000 construction workers are living and working there. That's more people than live in Brunswick! Most of them probably just arrived in Beijing from the countryside and when the project is finished they will go home. Actually, most of them went home for Spring Festival (Chinese New Years) but then returned to work in Beijing four weeks later. Almost all building projects are staffed by migrant labor.

During the same time that I was away (July to December) the hole in front of the kids' school has sprouted six 20 story apartment buildings that are almost ready for occupancy; even more amazingly, the fourth ring road near the kids' school had gone from a newly demolished strip of sandy dirt to a six lane highway (four for cars, two for bicycles) complete with an amazing below grade underpass and four more lanes of access roads. How long have we been working on widening the Maine Turnpike?

In the space of six months in Beijing, you can see a building built, occupied, destroyed, and rebuilt. Is this an example of disorganized zoning boards? Perhaps, but the economist in me says that is just as likely to be the result of an efficient decision making process. Given the cost of building, it may pay to build a building in a certain location even if you know that location is scheduled for demolition soon. It is all about the relative cost of labor. We in the U.S. are use to our relatively high costs of labor and our slow but steady 1 to 3 percent annual growth rates. In China today, labor is cheap and plentiful (from the economic view, cheap and plentiful are really the same thing). Their economy is growing at 7 to 9 percent a year. To me, it is an economist's paradise, where I look out the window and literally watch the economic landscape change overnight.