By Stump Connolly

I went to Xi’an looking for China’s past and came away with the eerie feeling I’d just seen its future.

Xi’an (pronounced she-ON) is the capital of the Shaangxi province, a mountainous region in central China where Chairman Mao took refuge after The Long March until his peasant revolution succeeded in 1949. The city lies along the Wei River in a rich agricultural valley with mountains to the north holding large deposits of coal.

At one point, it was considered the breadbasket of central China. As our plane approaches, you can see the first signs of winter wheat in the fields. It’s a hazy view because cheap power has made Xi’an a magnet for heavy industry. Four textile mills, two auto plants and a host of other factories operate off the energy of ten coal-fired power plants, so smog often gets trapped in the lowlands. As you can imagine, this is not good for the wheat or the seven million people who have come to settle around the old city.

The Terra Cotta Soldiers

Xi’an made its way onto our tour agenda because it is the site of an incredible archeological dig into the ancient history of Qin Shi Huang, the boy emperor who first unified China in 221 B.C.

Qin is an odd figure in Chinese history. He became king at the age of 13. By the time he was 22, his army had conquered the seven warring tribes in the region, and he named himself the first Emperor of China. During his reign, he standardized the language, currency, weights and measures of the empire and is reputed to have laid the first foundation for The Great Wall. (Yes, that wall.)

From the moment he became king, Qin was obsessed with his own mortality. Fearful that his enemies would strip away his legacy after he died, he began building a mausoleum in an orchard outside Xi’an between the mountains and the river because feng shui dictated this was the best place to attain eternal peace and happiness.

Around his bier he constructed a rough map of China (as people in 221 B.C. knew it) and filled its rivers with mercury to poison anyone who opened the tomb. In the  fields leading up to his tomb, Qin also set out an army of terra cotta soldiers standing in formation to ward off his foes.

The Helmut and The Well

All that history of the Qin Dynasty was just legend until 1974 when three farmers were digging a well in their field and unearthed the helmet of a terra cotta soldier. Before long, they found the head, arms and breast plating of other clay soldiers. Well, one thing led to another, and soon enough antiquity experts determined there were as many as 7,000 such soldier statues strewn in pieces around Qin’s burial site.

Two thousand years after the Qin Dynasty was lost and forgotten, and after a decade of excavation, the Chinese government opened a national monument on the site in 1983 to memorialize the terra cotta soldiers (now called warriors).

Today, it consists of three climate-controlled excavation pits, two gift shops. a restaurant, a museum, and a cinema-surround movie theater that provides an historic re-enactment of the tomb creation. (Think Ten Commandments.)

Historians say it took 700,000 men to complete the project. The burial grounds cover 21 square miles. The mausoleum once rose as high as 115 meters, and archeologists, although they believe they have found the tomb, are still wary of opening it for fear of the toxins that will be released when they do.

The Movie Version

In the movie version of events, Qin set up a small village of 27,000 laborers to cast the terra cotta soldiers, paint their faces with earthen dyes, and place them in formation to protect the king’s coffin. The work took 39 years to complete. But it all was for naught.

When the king died at the age of 57, his body was indeed buried in the tomb. But enemy soldiers soon overran the site, looting, burning and destroying the terra cotta soldiers, but leaving the tomb itself untouched because they feared the mercury poison.

The movie is filled with documentary shots of the Wei Valley when the tomb was uncovered in 1974. A narrow dirt road winds through the mountainside to the farmer’s well. Rushing rapids carry water down into the Wei River. The first visitors to the site travel on a two-lane blacktop that cuts across endless fields of wheat.

A Skyline of Empty Buildings

Going to see the Terra Cotta Warrior monument today is a very different adventure.  Our tour bus cruises along on a 4-lane highway. Concrete towers rise up out of the wheat fields in clusters like little Lego Lands. Cranes and bulldozers make way for factories and warehouses, and billboards advertise more development to come.

I sat next to a hotel development executive from Florida as we drove back into Xi’an. We counted 22 new Lego Lands on the horizon, all unfinished or unoccupied. By our modest calculation, we were probably looking at 50,000 apartments that would be coming onto the market in the next 12 months. Most had all the aesthetic charm of the Robert Taylor Homes. And we were only looking at one road leading into the city from one direction. It’s not a stretch to think Xi’an will have 300,000 new apartments next year. Filling them with residents––people who can actually pay to live in a new apartment in China––means Xi’an must attract almost one million more residents in the next year to developments that have no schools, parks or infrastructure to support them.

Potemkin Villages

My skepticism about Xi’an’s future started almost as soon as we arrived Xi’an. On the road into town from the airport, we passed more clusters of eight, nine, ten apartment towers, all in a row, all neatly positioned along landscaped boulevards––and all empty, like modern Potemkin villages.

“Who is going to live in all these apartments?” I asked our new guide.

“The farmers,” he said.

“That’s a lot of farmers,” I whispered to my wife. “What are they growing? Acapulco Gold?”

“We are a big city,” our guide explained, sounding every bit as defensive as a chamber of commerce spokesman. “We have the 8th largest airport in China. We are building a new high-speed rail terminal. We’ve been designated an economic and technology zone. And our country’s new president Xi Jinping is from Xi’an.

“He will make it work for us,” he promised.

China’s Real Estate Bubble

When I got back to the United States, I discovered that I wasn’t the only one with doubts about the Chinese housing boom. 60 Minutes reporter Leslie Stahl also went to China last summer to report on “what might be the largest housing bubble in human history.”

Her 60 Minutes report in August noted that China now has enough vacant high rise apartments to fill as many as 24 cities. One Inner Mongolia city with a population of 100,000 has vacant new apartments that can hold one million people. Multimillion dollar apartment complexes and shopping centers sit idle outside most big cities, Stahl reported, often for two or three years.

Many of the apartments are being financed by middle class Chinese residents because the return on bank investments in U.S. treasury bonds is so meager. The investors are hoping to resell their units, but rising prices have driven the cost out of the reach of the typical Chinese family. The average apartment in Shanghai today costs 45 times the average annual salary of workers, according to a Shanghai real estate expert 60 Minutes spoke to, and the implications of a slowdown in sales are serious. About 50 million construction workers have been engaged in the home building boom, which accounts for 20-30 percent of China’s recent economic growth .

If the bubble bursts, Weng Shur, China’s biggest homebuilder, told 60 Minutes, the whole Chinese economy will unravel.

Inside the Old Wall

My doubts about the high rise construction didn’t diminish the pleasure we found inside the gated walls around the old city of Xi’an, where the towering new high rises are banned. For the first time on our trip, I felt like I was experiencing the real China––a mixture of old and new that was, frankly, delightful.

One night, we wandered down a back alley and enjoyed a hot pot meal in a family restaurant. The only person who spoke even halting English was their son in high school. The next night, we went out in search of some Aleve at the local Walmart and found ourselves on a street as lit up with neon signs as Las Vegas.

Xi’an at night is a city of lights. The monuments are aglow in festive colors. The subway has peddlers under illuminated billboards hawking blinking clown masks. When it came time to make our way back to the hotel, we boarded a bicycle cab that fearlessly wound it way between double-decker buses to deliver us to our destination.

Fun doesn’t fully describe this experience until you balance it against the dread that comes in the morning. That’s when you drive to the airport and pass by all those empty apartments again. It’s hard to escape the ominous feeling that somebody is going to pay for this miscalculation. And it won’t be the Chinese government, it will be their middle class investors––and the world economy.

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