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### the central government also doing the same thing.................building tens of ''empty'' cities yearly...........
The village of Shiji has always been poor. It is little more than a dusty grid of brick shacks and its residents live on an average of just 10,000 yuan (£1,000) a year.
But then, a miraculous transformation occurred. The locals suddenly noticed that they were rich.
"We have become a BMW town!" wrote one shocked villager on a local internet forum. "In our county, there are now 800 BMWs and 600 Mercedes, 500 Audis, 50 Porsches, 30 Jaguars, one Ferrari, one Lamborghini and one Maserati," he added.
Miracles abound in modern China, where countless families have become fabulously wealthy in a single generation. But the dramatic change in Shiji's fortunes raised eyebrows and Shiji's boom ended as abruptly as it began.
What happened in Shiji is a fraud that plays out every day in China's murky economy, as local Communist Party officials and greedy entrepreneurs collude in vast pyramid schemes.
"It all began when a man named Shi Guobao returned to Shiji from Beijing," said Zhu Yi, the head official in the village.
"He became a property developer, but he also became a loan shark." Together with 17 of his friends, Shi began tapping the villagers for their savings, promising to pay them 10 per cent interest each month.
The gang quickly raised 350million yuan, (£35.5million) which they then lent out at rates of 30 per cent or more each month to borrowers including local property developers.
For a while, the scheme worked well. Other property developers borrowed from Shi in order to begin construction and the local government, which earned income from every acre sold to the developers, also prospered.
But there was little demand for the huge apartment blocks, which today stand empty and half–finished. And when the borrowers started defaulting on the loans, the pyramid collapsed. Around 1,700 villagers have complained to the police, some lost their entire life savings. Two villagers were killed in a mysterious car crash after trying to reclaim their money from one of the loan sharks.
Today, the only luxurious cars left are parked outside the local county government offices and Shi and his 17 friends are either in prison or under house arrest.
The village of Shiji has always been poor. It is little more than a dusty grid of brick shacks and its residents live on an average of just 10,000 yuan (£1,000) a year.
But then, a miraculous transformation occurred. The locals suddenly noticed that they were rich.
"We have become a BMW town!" wrote one shocked villager on a local internet forum. "In our county, there are now 800 BMWs and 600 Mercedes, 500 Audis, 50 Porsches, 30 Jaguars, one Ferrari, one Lamborghini and one Maserati," he added.
Miracles abound in modern China, where countless families have become fabulously wealthy in a single generation. But the dramatic change in Shiji's fortunes raised eyebrows and Shiji's boom ended as abruptly as it began.
What happened in Shiji is a fraud that plays out every day in China's murky economy, as local Communist Party officials and greedy entrepreneurs collude in vast pyramid schemes.
"It all began when a man named Shi Guobao returned to Shiji from Beijing," said Zhu Yi, the head official in the village.
"He became a property developer, but he also became a loan shark." Together with 17 of his friends, Shi began tapping the villagers for their savings, promising to pay them 10 per cent interest each month.
The gang quickly raised 350million yuan, (£35.5million) which they then lent out at rates of 30 per cent or more each month to borrowers including local property developers.
For a while, the scheme worked well. Other property developers borrowed from Shi in order to begin construction and the local government, which earned income from every acre sold to the developers, also prospered.
But there was little demand for the huge apartment blocks, which today stand empty and half–finished. And when the borrowers started defaulting on the loans, the pyramid collapsed. Around 1,700 villagers have complained to the police, some lost their entire life savings. Two villagers were killed in a mysterious car crash after trying to reclaim their money from one of the loan sharks.
Today, the only luxurious cars left are parked outside the local county government offices and Shi and his 17 friends are either in prison or under house arrest.
