During the Tang dynasty, radical poet Du Fu wrote: 'Within the vermillion gates, wine and food rot; along the road outside, bodies become dead bones.' A recent dinner with officials in charge of infrastructure tendering for Beijing's plethora of construction projects underscored Du's social concerns.
In one of the capital's plushest Cantonese restaurants, the finest seafood is eaten, washed down with a huge bottle of Hennessy XO cognac, which has been placed centre-stage on the table. Mini-skirted waitresses repeatedly top up the glasses, and the air is filled with hilarity.
This is how the tendering process works for the massive 'Olympic economics' feeding frenzy. Much of the hypergrowth, new wealth and consumption seen in Beijing today owes its appearance to government spending and kickbacks.
Total infrastructure spending for the Olympics will hit 1.5 trillion yuan: between 700 and 800 billion yuan has been designated for Beijing's 'small and new townships'; 280 billion yuan for city infrastructure; 150 billion yuan for hi-tech industry; 60 billion yuan for transport facilities; and 22 billion yuan on stadiums. That is a lot of spending in a very short time; worth another toast of Hennessy, no doubt.
Tanbing describes the process of frying an egg in a wok, swirling it around constantly so that it becomes as thin as a pancake. The term is now being used to describe Olympic construction, which is spreading out from Beijing's third ring road, absorbing villages. Like a magnet, Olympic economics has drawn cement and steel factories from around the country to relocate to Beijing. These are the two industries most cited by central government economists for inciting economic overheating.
Within three years, Beijing's annual cement production capacity has grown from eight million tonnes to 28 million tonnes. To feed the frenzy, the neighbouring provinces of Hebei, Shandong, Tianjin and Henan, together with Inner Mongolia, have added 21 new cement-making facilities, increasing production by 16.2 million tonnes. This brings the provinces' total capacity to 20 million tonnes per annum.
