Opinion | Bankrupt Detroit provides a warning message for many Chinese cities
While former industrial giant's fall may be met with glee by some, there but for the grace of Beijing could go many of China's metropolises
The news that Detroit filed for bankruptcy last week was not unexpected and to a certain extent seemed inevitable. But it still dominated headlines around the world as the city, once the symbol of US manufacturing prowess and the centre of the auto industry, finally succumbed to mismanagement and financial crisis with as much as US$20 billion of debt.
In China where the auto industry is booming, a certain glee can be easily detected in the state media's comprehensive reports of Detroit's bankruptcy, complete with pictures of abandoned buildings. For many mainland officials and nationalists, it is hard to find any better symbol of America's decline and the rise of China at a time when Beijing is trying to flex its muscles and play a more important role in the international community.
Interestingly, some enterprising mainlanders have seen Detroit's bankruptcy as a lucrative investment opportunity. Rumours of abandoned or foreclosed homes being sold for as little as one US dollar have spread like a prairie fire among mainlanders who feel priced out of their own booming property market. Well, such bargains may lose their appeal when they see Detroit's urban decay and crime.
Nor should mainland officials gloat too much. The symbolism may be great but that is about it. US carmakers are still going strong and, ironically, are starting to derive major revenue from the Chinese market.
Under the US federal system of government, American cities run mainly according to their own means and a number of them have filed for bankruptcy over the years without deeper and national implications.
Even bigger cities like New York, Philadelphia and Cleveland once teetered on the brink of financial ruin, although Detroit is the first major US city to succumb. Instead, mainland officials should view Detroit's slide into bankruptcy as a serious lesson as they try to build up the nation's manufacturing prowess through industrial restructuring and upgrades.