Money, Money Everywhere (Beijing alone can buy a year of USA GDP)

It looks like China is full of money. Hard to imagine how a communist’s country like China can easily outperform a capitalist’s country like USA. Money, money everywhere is a norm especially if you own a piece of land in a city in China, not USA.

Chinese Economic Weekly (N0.1 /12) reported the land value of Beijing can easily buy over a year of GDP of USA. And the combined land value of Beijing and Shanghai is more than the combined GDP of the 5 top of economies in the world in a year.

It seems history repeat itself. When Marco Polo visited China in the 13th century, he reported to Europeans that there were full of gold in China. His feedback and observation was Chinese were so rich then and Europeans were far behind in wealth.

If we look back in the history of China, being the land-based country, people there love to own land. Owning a piece of land is a status symbol. To many poor people, it is dream comes true if they finally own a piece of land or a house. In the Zhou dynasty, in order to make the dynasty last forever, they implemented a system of divide and rule. The heavenly King of Zhou gave lands to his relatives (brothers, sons etc) and contributors to the nation (generals, etc). This made only a selected group of elite could own land in Zhou dynasty. A person importance was also reflected in the amount of land that he owned. Other people, including businessmen and farmers, were not allowed to own land.

However, the system was abolished after Zhou dynasty. Since then, private were allowed to own land and acquire land, hence, businessmen, temple and religion leaders, farmers were able to own land. Some big framers and businessmen were so rich that their land owning can match the wealth of the country. It was not uncommon that these farmers and businessmen used dirty tricks to exploit land from poor people.

Now back to the land and money story in China. Before we begin, let understand some basic numerical figures in Chinese. The single digit from 1 to a thousand is about the same calculation as the British or Americans. From ten thousand onwards, you need to pay attention:
Qian 千: 1,000
Wan 万: 10,000
100 Wan万: 1 million
1 Qian Wan千万: 10 million
1 Yi 亿: 100 million
10 Yi: 1 billion

This will help you in understanding the following statistics.

In 2010, Beijing received an income of 1641 yi yuan from land sales. On average, it is about 8,000 yuan per square metre. The city has 16410.54 square kilometres, converting it to 164.1 yi square metres. If you multiply land cost and land area, it will give Beijing city the land value of 130 wan yi yuan if all lands are sold.
In 2010, the US GDP is estimated to be US$ 14.5 wan yi, converting it into yuan, it will be about 95 wan yi. So, simply Beijing alone can have more than enough land money to buy over 1 year of USA GDP.

By the same calculation, Shanghai, with a smaller land area, is still managed to generate 68 wan yi yuan of land value. In 2009, the top 5 economies besides China were USA (US$ 14.26 wan yi), Japan (US$ 4.844 wan yi), Germany (US$ 3.818 wan yi), France (US$ 2.978 wan yi), and UK (US$ 2.787 wan yi). The total GDP of the 5 countries was US$ 28.7 wan yi in 2009. It was about 189 wan yi yuan comparing to 199 wan yi yuan of Beijing and Shanghai. Hence, two cities (Beijing and Shanghai) will have enough land money to buy over the combined GDP of the top 5 economies in the world.

Is this story untrue? As far as you believe in figures and statistics, it is presenting the truth and facts. If you consider the appreciating land value and the Chinese currency, yuan, the income gap between China and the top world economies will be widening. No matter, economists are predicting very soon China GDP will be the number one in the world.

When China becomes richer, its rich-poor gap is also becoming bigger and bigger. A report from Guangzhou Daily reported that rich villages in Zhejiang province are allowed to build their own (by their own money) walls to prevent thefts and crimes. You even need to use the digital security cards to pass through the gates of the wall. What a big difference inside and outside the wall. If the Great Wall of China cannot prevent China from attacks by foreign forces, is this so-called 7 metre height and 500 metres long wall in Zhejiang province can be an effective tool to prevent poor Chinese from entering the wall?