The Economist

44 The EconomistAugust 4th 2018

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T

IANJIN a northern mega-city has pro-

duced some of China’s wittiest comedi-

ans. It is a good thing that its 15m residents

have a sense of humour. Their hometown

was at points over the past decade the

fastest-growing of China’s 31 provincial-

level regions. Since the beginning of last

year it has been the slowest (see chart).

Businesses joke that the sole part of the lo-

cal economy that is expanding these days

is the value of assets seized from corrupt of-

ficials. The city’s sharp deceleration serves

as a stress test of China’s economic pro-

blems and as a warning of the difficulty in

fixing them.

Other areas of China are also grappling

with subdued growth. Commodity-pro-

ducing regions have struggled to adapt to a

modernising economy as has the rust-belt

north-east. But Tianjin stands out as a place

that should be doing better. It boasts a busy

port and good universities. A skilled

manufacturing hub it has attracted firms

from Airbus to Motorola. Just half an hour

from Beijing by train it is well situated.

The problem is that the city’s planners

got far ahead of themselves. They built a

big new financial district which they

billed as China’s Manhattan in the Binhai

district on the city’s far-east side. Nearly

70% of offices there are vacant according to

Jones Lang LaSalle a property-services

stopped a few yearsago. The skyscraper’s

skeleton is nearly 600 metres tall and sur-

rounded by a dozen other abandoned

building sites which are a short drive from

a fledgling polo club itself ringed by empty

luxury residences.

Corruption fuelled the excesses. In the

city centre Zhao Jin a property magnate

paid off bureaucrats to flout zoning rules.

He had permission to build three towers of

no more than 35 storeys but instead went

for 66 storeys. He and the bureaucrats

(some of them anyway) are now in jail; his

development an unfinished eyesore was

listed for demolition. In another case at

the port managers of a chemical ware-

house exploited connections to pass in-

spections on matters from fire safety to

chemicals handling. In August 2015 a mas-

sive explosion obliterated the warehouse

and the surrounding area killing 173.

The deadly blast seems to have marked

a turning point. Huang Xingguo mayor

since 2007 was jailed last year for corrup-

tion. Li Hongzhong Tianjin’s new Com-

munist Party boss has presided over a

clean-up. Corruption investigations in the

first half of this year have already exceeded

the total for 2015. The government has also

changed its economic course. It has tight-

ened its belt budgeting nearly 15% less

spending this year. Once-busy building

sites have attracted scavengers. Ads for

metal-recycling services are plastered on

construction walls in the high-tech zone.

Tianjin along with a handful of other

Chinese regions has admitted that its eco-

nomic record was grossly inflated. Binhai

which accountsfor halfthe city’soutput

declared in January that itsGDPwas a third

smaller than previously reported. Partly as

a result of correcting for past fabrication

firm. That flatters the reality. One whole

floor of the New Finance Building a glis-

tening complex has been converted into

“escape rooms” for adventure games. “The

buildings are great” Zhang Junkai a port

worker who lives nearby says with a wry

smile. “It’s just that we don’t have enough

people in them.”

Some 60km away on the city’s western

fringes the waste iseven more striking. A

private developer wanted to create a high-

tech zone anchored by the world’s fifth-

tallest skyscraper. Construction all but

Trouble in Tianjin

Where are the people?

TIANJIN

What used to be China’s fastest-growing region is now its slowest

China

Also in this section

45 Greyhound racing in Macau

First to worst

*Estimate to

June 30th

Sources: CEIC; Economist

Intelligence Unit

Tianjin ranking of GDP growth among

Chinese provinces

31

25

20

15

10

5

1

2000 05 10 15 18*