The Union of Soviet Socialist Republics (USSR) was a single-party state ruled by the Communist Party. The state was structured under a highly-centralized government and a command economy, meaning both capital and resources could be mobilized quickly and proficiently. However, speed and agility do not guarantee economic efficiency and can often result in a massive misallocation of capital, which ultimately comes at a high price. This is a lesson China has chosen to ignore as signs of capital misallocation are widespread throughout the People’s Republic today.

The Economist Intelligence Unit (EIU) estimates that average living space per head is over 30 square meters in China, extraordinarily high given the country’s current income levels. “Based on international comparisons, a country at China’s level of GDP per head should have 20 square meters of living area, which would mean that China is 53 percent over-housed," according to the EIU. Despite China already being the most “over-housed” country in the world, official data show a further three billion square meters of residential property currently under construction, according to The Wall Street Journal.