“...Ms. Meilin. Where are we?”
“Oh, you don’t know? This is the Forbidden City. Tourists usually come during the day, but the Forbidden City is actually far more beautiful at night. Isn’t it wonderful?”
“...I know it’s the Forbidden City. But you said you’d show me the state of Chinese real estate. What does this have to do with that?”
“That hurts, you know? Look. There are fewer tourists around the Forbidden City than you’d expect, right? I’m showing you China’s macroeconomic indicators right now.”
A monkey dancing in the palm of Buddha’s hand...
That was what I thought as I was forced to tour Beijing for the past hour.
“Oh my, the night view is especially pretty today~ Shall we get out for a bit and take some pictures?”
I calmed the boiling in my stomach and put on a salesman’s smile.
I had to endure it. I didn’t know how incredible this information was supposed to be, but I had to hear her out first. In truth, I had no other option but her.
“Oh, right! Look at me, losing my head. Today’s the day, isn’t it?”
“Wh-what is?”
“Hurry and get back in. We need to go to the Haihe River right now!”
“What’s going on?”
“Today is the last day of the Haihe River Cherry Blossom Festival. Ah... what if it’s already started? They said the biggest drone show would be held today. Hurry!”
Whether she knew how I felt or not, she stepped on the gas and headed for the Haihe River at a hundred kilometers an hour.
“Mr. Sejun. There’s something I’m curious about too. May I ask?”
“Go ahead.”
“When you work at a sovereign wealth fund, you meet all kinds of people, right? Famous people too?”
“Yes, well.”
“Then have you ever seen High End, Exit, or Super Kids?”
“...Who are they?”
“You’re Korean and you don’t know those singers? They recently released albums and even appeared in Chinese dramas.”
It seemed my impression that she was a tiger’s daughter born of a tiger father had been mistaken after all.
All the way to the Haihe River, her interest was entirely in K-pop. Rather than a businesswoman, she was too untainted... just a mid-twenties girl(?) fan who loved the Korean Wave.
“Have you seen them too, Mr. Sejun?”
“...I haven’t seen them, but we do hold a large stake in their company.”
“Wow—then can Mr. Sejun’s company call them over?”
“If we play games with the shares, I might be able to see them at the prosecutors’ office... but we can’t exactly summon them separately.”
Hearing my answer, she smiled bitterly.
“That’s very different from China. Here, if you have power, you can call celebrities all the way to your bed.”
“...Pardon?”
“We’re here. Oh, thank goodness! It looks like the drone show just started!”
Following her finger, I saw thousands of drones decorating the night stage. And the sight was magnificent enough to melt away my irritation in an instant.
Thousands of drones became a dragon in time with the song lyrics, then the Forbidden City, then animated characters.
Along with them, pleasure boats drifted leisurely down the middle of the Haihe River... Everyone, without exception, took photos as they promised the cherry blossoms they would meet again next spring.
“How is it, Mr. Sejun? Wonderful, isn’t it?”
“It’s frightening.”
“Hm...? Frightening?”
How much of the future I saw was real?
In truth, even now I still couldn’t believe what I had seen with my own eyes. To me, the stunning scenes of the drone show felt like mushroom clouds rising over Nagasaki and Hiroshima.
When the drone show finally ended, I asked her,
“What’s the next item on the schedule? A night market tour?”
“Haha... I’m sorry. When you work in real estate, all you ever meet are grimy old men, so I wanted to cut loose a little today.”
“Did it help?”
“It was wonderful! If I weren’t on a diet, we would have gone to the night market too... Anyway, now that I’ve shown you all of China’s macroeconomy, let’s go to real estate.”
Had she played with me to her heart’s content? She smiled brightly and got back into the car.
Watching her step on the gas to a hundred kilometers an hour again, I asked worriedly,
“Where are we going?”
“You’ll know when we get there.”
“...What I’m curious about is the unsold real estate situation in China. Can’t we talk at a nearby café?”
“Seeing once is better than hearing a hundred times. It’ll be better for you to see it yourself than for me to explain.”
I sighed.
“All right.”
“Fasten your seat belt tight~”
On the way, something suddenly occurred to me, and I asked her,
“But Ms. Meilin. Why did you ask about celebrities earlier? With someone of your standing, I feel like you could find that out without asking me.”
“Because I’m frustrated and curious. The truth is... I want to leave China?”
“...Pardon?”
Suddenly, a dark shadow fell over her face.
“Honestly, thanks to my wealthy father, I live this well, but I always feel like I’m living as a well-fed pig. If I want to expand into bigger businesses, I have to go under someone powerful, but even that can’t stray from the Party’s grand design. A prison without bars, you could say.”
“What do you mean?”
“It’s something people who have enjoyed freedom since birth can’t understand. For example, Party regulations that say all media must end with good being rewarded and evil punished... Regulations that ban pretty boys and thereby ban men from grooming themselves... Regulations that ban chaebol dramas and thereby ban Cinderella stories. Can you understand that, Mr. Sejun?”
“...”
“You probably can’t. This is something only people born in a republic of censorship can feel. Hoho.”
People ask: if an authoritarian society is best for economic growth, why do we need democracy?
Economists answer: there is a clear limit to an economy that can grow that way, and after passing a critical point, freedom, diversity, and creativity become the engines of growth.
The country that demonstrates this best is the United States. Conversely, present-day China is showing that very critical point.
After Hu Jintao, China returned to an era of dictatorship, and for a while it showed solid economic growth, rising in one stroke to become the world’s second-largest GDP empire. But the various indicators released recently show that China has entered the middle-income trap.
Due to the birth control policy implemented until the early 2000s, the proportion of the elderly population rose sharply, and the birthrate that recently hit rock bottom has made even the country’s future indicators look bleak.
In particular, as the Chinese government records the worst youth unemployment rate in its history every year, the exodus of Chinese youth has also grown more severe. Among them, the majority are people like Meilin, born free-spirited and fleeing because they are sick of the authorities’ censorship.
“...”
In truth, the reason I doubted China’s statistics wasn’t simply because of that damned dream.
Every country that has experienced developmental dictatorship must go through a kind of growing pain at least once. A real estate bubble.
Land prices are usually a leading economic indicator, rising before the economic growth rate. But if the economic growth rate slows, that bubble bursts in an instant. Like a futures or options product that everyone thought would rise in the future suddenly becoming worthless.
That was why I had no choice but to doubt China’s statistics.
Every indicator from global rating agencies pointed to a slowdown in China’s growth, so how could their real estate be this safe?
“We’re here.”
The place we arrived at after following her was a construction site where steel frames rose precariously.
“...Where is this?”
“Haidian District. Xuequfang... In other words, a place like Korea’s elite District 8 school zone. But this construction hasn’t gone up for three years.”
“Land like this has been sitting idle for three years?”
“Yes. Not only here, but there are many buildings like this in Dongcheng and Xicheng Districts too.”
She looked up at the building and counted on her fingers.
“About five that I know of? All of those sites are being handled by Fengda, Wangke, and Bigui. In China, they’re practically state-owned enterprises... but what can you do? The real estate market has frozen because of the recent high interest rates. They probably can’t secure construction costs due to unsold local apartments, so they’re leaving this land idle.”
“...”
“You said you couldn’t trust the Chinese authorities’ statistics, right? Honestly, even as a local, I feel the same. If buildings can’t go up even on China’s most prime land, do you really think local unsold units amount to only that much?”
I was left speechless. As expected, it had been a foolish idea. Going around all of China’s local governments to check unsold units...
The answer had actually been close at hand. Land equivalent to Apgujeong, Cheongdam, and Seocho in Korea had been sitting idle for three years. And not just one or two sites, but five of them... If China’s most valuable golden land was like this, could local apartments possibly be safe?
“Ms. Meilin...”
Suppressing an enormous fear, I barely managed to speak.
“If it isn’t too much trouble, could you show me more of those construction sites today?”
“That’s not difficult. How many would you like to see?”
“All the idle land in the xuequfang areas.”
“All of it? Then even staying up all night won’t be enough...?”
I spoke in a thin, trembling voice.
“I’ll compensate you sufficiently. Please, I’m begging you.”
*
The Marriott Hotel in Chongqing.
Manager Oh exhaled cigarette smoke as he stared at the hazy sky.
At the moment, his mood was blacker than that heavy-metal sky. The meeting with the broker he had met yesterday through an introduction from the Ministry of Trade, Industry and Energy had been utterly unproductive.
The man, who claimed to be well-versed in real estate, had instead treated him like a lunatic. He refused to believe that the Chinese authorities had falsified their statistics and was confident that unsold local apartments were a problem that had always existed and would soon be resolved.
He had even tried to sell him on the idea that if the pension fund invested money with him, he would double it within five years.
“Damn it. I’m the crazy one.”
Thinking about it again, it had been far too reckless. No matter how suspicious the Chinese authorities were, did it make any sense to check the unsold housing situation himself? China had dozens of local governments the size of Seoul.
—Bzzzz. Bzzzz.
As he was lamenting his situation, his phone rang noisily.
When he checked the caller, it was the root cause of this entire situation, Lee Sejun.
“Hello—”
—Manager, I think we need to start unloading Chinese construction company bonds!
“What?”
—I don’t think we need to check all the unsold units in the provinces. I think you need to come back to Beijing right now!
“What the hell are you talking about first thing in the morning? How can you tell us to sell them off so carelessly when you don’t even know what they are?”
Manager Oh replied in an irritated tone. Considering the humiliation he had suffered yesterday because of this bastard, he was still holding back a great deal.
But the bastard continued in an excited voice.
—We need to sell those scraps of paper right away. We need to dispose of the stocks too!
“What? What is this?”
—I went all over Beijing yesterday with the broker you introduced me to. And it really is a crisis. Buildings aren’t going up in the xuequfang areas.
“...What’s xuequfang?”
—China’s elite school districts. In Korean terms, places like Apgujeong. According to the brokers, Fengda, Wangke, and Bigui won all those sites, but they’re leaving every piece of prime land idle right now.
Manager Oh sprang to his feet.
In truth, even if someone told him the number of unsold units in the provinces, it didn’t really feel real. But land in Apgujeong, Seocho, and Cheongdam sitting idle was a very clear snapshot of Chinese real estate.
“Is that true?!”
—Yes. I confirmed every halted construction site!
“What in the world...”
—Every hour matters! Considering current raw material prices, they won’t be able to continue those construction sites going forward either. They couldn’t recover construction costs because of unsold local apartments, and that’s definitely why they’re leaving prime land idle! We need to sell the bonds and stocks right now!
As Manager Oh slumped down, the hazy sky now looked utterly yellow to his eyes.
A real estate bubble was a frightening thing. Even the mighty United States spent years cleaning up subprime, and because of that, it failed to stop the rapid rise of China’s economy.
If the same disaster unfolded in China... what effect would that have on global stock markets?
“...Understood. I’ll go to Beijing within the day.”
After hanging up, he thought for a moment, then picked up his phone again.
When the call connected at last, he suppressed the tremble in his voice and said,
“Director. This is Manager Oh. It’s about the Chinese real estate matter. I think...”