The Impact Of The Electricity Supplier And The Weakening Of The Real Economy

For China's shopping malls and department stores, the increasing vacancy rate and declining rent have become commonplace.

However, official figures show that retail sales in China have rebounded strongly and helped China's economy exceed the expectations of experts in the third quarter.

The Reuters conducted an in-depth investigation of this huge contrast.

A shopping centre in downtown Shanghai is very unnatural.

This underground shopping mall is located in one of the most developed cities in China. However, its performance is not good enough and its traffic is seriously insufficient. Xu, a shopkeeper of a clothing store, said, "sometimes I can't sell a skirt every day."

There are many reasons for this obvious contrast, including the fierce competition brought by online sales and the increase in retail data caused by government procurement.

Coupled with improper management of assets, the weakness of shopping centres is expected.

More importantly, the struggle of Chinese physical retailers has amplified a policy problem.

Businesses have built these shopping centers to get a share in the growing consumer market, but now they have become the debt burden of Chinese enterprises.

The total debt of Chinese companies now reaches 160% of the total GDP, which is more than 2 times that of the United States.

The owner of the mall is trying to redecorate the shopping centre to attract more customers, but the effect is not yet known.

In another big city in China, sunshine department store in Beijing decided to suspend business this month.

Their manager, Ni Guifang, said they would turn to online sales to find a bigger market.

The Bank of China once again lowered interest rates on Friday, trying to revive the economy, the sixth time in a year.

Tim Condon Condon, an economist at Singapore's ING, suggests investors can't misinterpret the retail data given by Chinese officials.

These data do not mean that the consumption of Chinese residents is growing, as it includes some sales brought by government procurement.

On the other hand, despite the obvious slowdown in growth rate,

The growth rate continued to stay at 2 digits.

Alibaba, the electricity giant, is expected to slump to 27% in the second quarter, even though it is much weaker than last year. However, compared with physical retail, this is still a very high growth rate.

With more Chinese consumers entering the middle class, the entertainment industry is booming.

In the golden week of October, movie ticket sales reached a record $300 million, an increase of 60% over last year.

However, if consumers' enthusiasm is not enough to keep pace with the construction of shopping centers, banks may face a lot of bad debts.

"

It's all right, but the overall trend is falling. "

Ni said.

And many large enterprises running shopping centers are also having a hard time.

Dalian Wanda, a real estate developer, said in January this year that it would close or replan 30 retail outlets, and that more adjustments would be made in 8.

Parkson, a Malaysia group with more than 70 department stores in China (Bai Sheng) closed several stores in northern China last year.

In 2013, their profits in China dropped by 58%.

"China

Growth is slowing, and retail sales are slowing down.

The number of shopping centers in many cities is too large, and the redundancy of shops has led to a sharp rise in vacancy rates.

Marie Lam, an analyst at Moodie, said in a research report.

More than half of the world's shopping malls are located in China, according to CBRE, a real estate company.

A large part of them can not bring enough returns to investors.

A cooperative report by China Chain Store Association and Deloitte shows that by the end of this year, the number of new shopping centers in China will reach 4000, an increase of 40% compared with 2011.

Real estate analysts say many of the plans for retail space have been launched by the local government, hoping to stimulate the economy through the development of real estate.

This led to the rush of construction and bad management of many shopping centres.

And consumers did not surprisingly refuse to shop in these hasty places.

Condon said, "if you build a shop but have no customers, it becomes a bad loan.

This is a big problem for banks. "