Watching the video in fast forward
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.