Model Chinese communist village a fraud

[Universe Prince]

Apparently the village of Nanjie has been living a lie. They have celebrated the "wisdom" of Lenin and Mao and even banned that modern evil, advertisements. And while other villages have struggled to get by, this happy communist village thrived. The village administration provided everything the villagers needed, clothes, villas, sedans. From Asia Times Online:

China's Nanjie village, also known as the "red billionaire village", has been touted as the last stronghold of socialism amid the capitalist-style economic reforms that have swept the country over past three decades. Its huge success, with economic growth outpacing even the country's remarkable expansion over the period, has now been exposed as a fraud. The village has become practically bankrupt, weighed down by 1.7 billion yuan (US$243 million) in net debts. It will take at least 200 years for the village to pay back the debts, according to Wen Wei Po, a pro-Beijing daily in Hong Kong. It is now clear that state coffers and state-owned banks have paid a dear price for setting up this model example of socialism. [...] Thus the village's secret is very simple. Some person or persons, to demonstrate the correctness of Mao Zedong thought and to save what little that had been left by socialism, ignored risks to have banks lend large sums to Nanjie to set up and maintain this model example of socialism. Once it became the model, the state had to throw in more capital to ensure the village continued to shine. However, the government leader who instigated the process has retired and the Agricultural Bank of China, undertaking a restructuring to become a joint-stock bank, can no longer issue loans solely on a political basis. As a result, Nanjie now finds it difficult to obtain low-interest loans. Not only that, it is under increasing pressures to repay what it has borrowed.

But it doesn't stop there. In an effort to pay down the debt, they scammed farmers into buying soybean seeds that supposedly would increase crop yield by 30% because these seeds had been to space and back. "Of course this was completely fictitious. Many farmers who bought the seeds lost their investment."

I especially like this final paragraph:

Disillusion with the Nanjie "myth" has cost the state coffers more than 1 billion yuan, while letting people become aware that any artificial distortion of market operations goes against economic laws and cannot last long.

Whole article at http://atimes.com/atimes/China_Business/JD18Cb02.html.

[Plane]

Almost anyone would agree to allow interference with "market forces" for good reasons.

But also in spite of good reasons the questions must be asked as to whether the interference for good reason will actually work better than doing nothing would.