Empty buildings: Beijing and Shanghai are becoming ghost towns of the economy

Empty buildings. Beijing and Shanghai are becoming ghost towns of the economy. Difficult to find a job. Young people in Beijing's labor market are scrambling for temporary work. China's special bonds are nearly 27 trillion yuan. Scholars expose ineffective investments and other issues. The three-year zero-out policy, along with the economic recession, has dealt a heavy blow to China's economy. Today, even major cities like Beijing and Shanghai are experiencing a severe recession, with few people in shopping malls and deserted streets. The state of China's economy is clear at a glance. Beijing resident Wang Li, The overall economy is not doing well. You don't have a job, you don't make money, and people like us basically avoid spending money if we can. We are all being frugal. It's no longer the case that people spend money on festivals like they used to. The Mid-Autumn Festival and National Day holiday are approaching, but the market in Beijing remains very deserted. An anonymous Beijing resident said, No one understands the state of China's economy better than the Chinese people living in it. Beijing resident Wang Li, Everything has gone up in price. For example, a bottle of vinegar. It used to cost 9 yuan, but recently it has gone up to 14 yuan. Jobs are being lost on a large scale, prices are rising sharply, wages are shrinking, and the decline in consumer purchasing power has made life more difficult for businesses. Beijing's Zhongguankun, once one of the city's most prosperous areas, now has deserted streets, sparsely populated malls, and only a few businesses and retail investors remaining in the science and trade mall. Lihua. Take Wukesong, which is near West Chang'an Avenue and the organization department of the Central Committee of the Communist Party of China. Every time I return, since July of this year, I find the number of stores there has sharply declined. There are streets where, in just 10 days, 7 adjacent stores closed down. Lihua, who frequently travels between Beijing, Hebei, and other places, has noticed that foreign-funded supermarkets in Beijing have mostly closed. Lihua. They've basically all closed down. Carrefour's last store in Beijing was acquired. Without Carrefour, Walmart is barely holding on in Beijing. However, this phenomenon is not unique to Beijing. Shanghai, China's economic center, is facing the same challenges. Video shooter. There are a lot of empty shops everywhere. And this location is pretty good, right next to Yu Garden, but now it's like this. Shanghai resident. Shanghai used to be very lively at night, especially with shops along the street, some for eating, some for drinking, some for shopping. Now, often after 8.30 pm, malls are already closing, and it has become very quiet. Due to the weak economy and slowing business activity, many companies and workers have begun to move out of Shanghai, and even out of China. Shanghai resident. I went to buy duckheads today. I know the boss well, so I chatted with him. He told me that many people who left Shanghai have never returned. This was rare over the past 10 years. Not only are a large number of shops closing, but office buildings where white-collar workers used to gather are also becoming empty. According to data from international real estate service provider Savills, in the second quarter of this year, the office building vacancy rate in Beijing was as high as 18.3%, a 13-year record. According to data from CBRE, in the second quarter of this year, the office building vacancy rate in Shanghai reached 18.7%, Shenzhen 20.3%, and Guangzhou 17.5%. Commercial activity in China's four first-tier cities has shrunk almost simultaneously. While some may avoid criticizing the Chinese economy openly, it is, in fact, the economy is in serious decline. Difficult to find a job. Young people in Beijing's labor market are scrambling for temporary work. After college graduates face unemployment and encounter setbacks in their job search, some rely on their parents' support and lie flat completely. However, young people who cannot depend on their elders are forced into the daily wage industry. To make a living, they gather in labor markets before dawn, competing for temporary jobs that pay daily wages. An investigative report published by Korean media outlet Chosun Ilbo on September 4th revealed the current situation at the Majuqiao labor market on the outskirts of Beijing. Majuqiao is the largest labor market in North China, where thousands of people eager to find job opportunities gather daily. Due to the difficulty of finding stable employment, more and more young people with higher education have recently flocked here, competing with other migrant workers for jobs such as kitchen assistants, cleaners, security guards, and other temporary positions that offer daily wages. On September 3rd, the investigative reporter observed that by 4 a.m. at the Majuqiao labor market in Beijing, many young people had already arrived. Mr. Zheng, a 29-year-old interviewed at the scene, said he has recently noticed many people younger than himself here. Most of these young people are new, and when they first come, they are glued to their smartphones. After failing a few times in this first-come, first-served environment, they eventually lower their phones. Mr. Zheng, who is from Baoding, Hebei Province, worked at a semiconductor equipment factory in Beijing two years ago, earning a monthly salary of 6,500 yuan. After losing his job, he now lives in a dormitory costing 20 yuan per day, and rushes to the labor market each morning to look for job opportunities. Reports describe elderly vendors near the Majuqiao labor market selling thread gloves for 2 yuan a pair and work shoes for 10 yuan a pair. The main buyers are new young workers. Every morning from 4 to 6 a.m., vans and buses pick up construction workers, kitchen assistants, logistics center sorters, cleaners, and security guards. The daily wages for these part-time workers generally range from 160 yuan, with more physically demanding jobs like express delivery loaders paying over 200 yuan. The report also revealed that, starting from the second half of this year, wages for daily jobs in the Majuqiao labor market have mostly fallen to below 200 yuan. However, the cost of accommodation in four-person rooms in the nearby daily rental village has risen to about 20 yuan per day. Near the labor market, some people can be seen sleeping on the streets to save on accommodation costs. The report noted that statistics released by the Chinese job search website Xiaopin in November last year showed that 50% of temporary workers in China are under 25 years old. Given the dramatic increase in the number of graduate students unable to find jobs, the actual youth unemployment situation in China is likely much more severe than official statistics indicate. China's special bonds are nearly 27 trillion yuan. Scholars expose ineffective investments and other issues. In order to boost the weak economy, Beijing authorities have expanded the scale of special bond issuance. As of July this year, the total balance of special bonds has reached 26.6 trillion yuan. Economists warn that the benefits of many special bond projects are exaggerated, and issues like virtual special bonds, ineffective investments, and misappropriation of funds are becoming increasingly severe, which could bring risks to the debt structure. In recent years, the scale of China's special bond issuance has expanded significantly. Data from the Ministry of Finance of the Communist Party of China shows that by the end of July, the balance of special bonds issued by local governments had reached 26.6 trillion yuan, accounting for 60% of the total local debt balance of 42.8 trillion yuan. For a long time, various problems have frequently occurred in the process of the Communist Party of China's government using special bonds. At the seminar on building a long-term mechanism for local debt recently held by the China Macroeconomic Forum, CMF, many participating scholars warned about some of the issues surrounding the issuance and use of local special bonds. According to mainland media yikai, Yuan Haixia, president of China Chengxin International Research Institute, said at the seminar that the overall efficiency of special bonds has always been low. As the traditional infrastructure sector becomes saturated and the marginal effect of infrastructure investment diminishes, the inefficiency of special bonds has become more prominent. Yuan Haixia explained that, according to audit reports, more and more special bonds are being used for projects with no revenue, and some regions even rely on inflating projected income to complete the issuance of special bonds. This inevitably brings structural risks to the debt. Furthermore, the misappropriation of special bond funds continues to occur. Under the pressure of low returns, local governments increasingly rely on issuing new bonds to borrow new to repay old to address their current debt problems. Yuan Haixia also mentioned that in recent years, due to the adjustment of the real estate market, referring to the continued downturn in the market, local government revenues have continued to decline. This reflects a mismatch between the structure of local debt, special bonds and general bonds, and revenue streams, thereby affecting debt sustainability. Zhao Quanhu, director of the Financial Research Office of the Chinese Academy of Fiscal Sciences, also warned in his speech that if the investment quality of special bonds is not improved, in the future, when special bonds become virtual, they may transform into another type of hidden debt. Floods in Hainan and Anhui. Farmers complain of losing all their money. A senior U.S. defense official said Thursday that China's newest nuclear-powered attack submarine sank earlier this year, and Taiwan's Ministry of Defense confirmed on Friday that it had learned about the sinking of the Chinese submarine. On Thursday, U.S. officials reported that in late May or early June this year, a suspected new Chinese nuclear-powered attack submarine with a distinctive X-shaped stern sank at a shipyard near Wuhan. Satellite images show that the shipyard's crane appeared to have been used to salvage the submarine in early June. Republic of China Defense Minister Gu Lixiang stated on Friday that Taiwan's intelligence agencies had learned about the sinking of the Chinese nuclear submarine. Republic of China Defense Minister Gu Lixiang, Based on relevant media reports, we have conducted research, and we have also used multiple intelligence and surveillance methods to gather information about the sinking. However, neither the Chinese military nor local governments have publicly acknowledged the submarine's sinking. A former lieutenant colonel of the Chinese Navy Command said the sunken submarine was not one of the traditional Chinese nuclear submarines known to the outside world. Yao Cheng, former lieutenant colonel of the Chinese Navy Command. The water in the Yangtze River is very shallow, generally not more than 100 meters deep. Chinese nuclear submarines, like the 093 class with a displacement of 8,000 tons and the 094 class with 10,000 tons, are too large to sail in the Yangtze River. If they run aground or hit something, it could easily cause a nuclear leak. The Chinese Communist Party should have 13 nuclear submarines, excluding the newly built 095 and 096 models and 48 conventionally powered submarines. I have been in the Navy for decades and have never seen a nuclear submarine enter the Yangtze River. Military analysts believe it is possible that the submarine in question is a small nuclear submarine or a conventionally powered submarine specially developed by the Chinese Communist Party for an armed invasion of Taiwan or operations in the Taiwan Strait. Current affairs commentator Wang Juntao said the incident reveals potential issues with training operations and equipment quality in the field of new submarines. When I was in the Second Machine Building Ministry, the second ministry of the machinery industry, we referred to the nuclear reactor of a submarine as one of the two bombs and one submarine. The Chinese Communist Party has shown little concern for nuclear radiation exposure among its personnel. The Chinese Communist Party has always sought to conceal the state of its military development, fueling suspicion and speculation from the outside world. Currently, many countries continue to strengthen defense cooperation to counter the threat posed by the Chinese Communist Party. The sinking of a nuclear submarine in Wuhan reveals the biggest weakness of the Chinese Navy's Shen Mingzhi, a researcher and director of the Taiwan National Defense and Security Research Institute, stated, Of course, as far as China, CCP, is concerned, it has concealed too many things. We know that there have been more than one submarine accident. Do you remember the rumor in the Yellow Sea that a nuclear-powered submarine exploded and sank? There are many different versions, and China, CCP, has never come forward to explain or admit it. The report stated that this submarine is the first of the CCP's new nuclear-powered submarines, with a distinctive X-shaped stern. The submarine was built by the state-owned China Shipbuilding Industry Corporation, and was discovered by the outside world at a dock on the Yangtze River in late May while undergoing final outfitting before going to sea. According to satellite photos of the wreck site, in early June, a large floating crane salvaged the submarine from the riverbed in the area. Su Ziyun commented, The Chinese navy still has structural weaknesses. After all, it is too eager to strike first after being attacked. From aircraft carriers to submarines, these two iconic ship types are what China constantly wants to use to surpass Britain and the United States, but this eagerness may leave some undetected technological gaps. Sometimes, hundreds of years of technological advancement cannot be accelerated. Blindly seeking speed may lead to potential risks. A Pentagon spokesperson later confirmed that the first new Chinese nuclear-powered attack submarine sank near the dock between May and June. Shen Mingshi added, The U.S. Department of Defense may use the results of this verification to achieve the so-called reconnaissance deterrence after the media's announcement. This means that the U.S. has the ability to track all of China's movements, so China should not act rashly. If it does, the U.S. will take effective measures to counter it. It remains unclear what caused the Chinese submarine to sink, or how many casualties there were. The sinking of the nuclear submarine has also raised several safety concerns. The outside world is worried about whether the submarine was carrying nuclear fuel and the risk of a potential leak. In response to the various speculations caused by this incident, neither the Chinese military nor the local government has acknowledged it. Shen Mingshi further noted, We see that the CCP has 46 conventional submarines, but relatively few nuclear-powered submarines. All U.S. submarines are nuclear-powered. If China wants to build the same nuclear-powered submarines as the U.S., it may take 10 to 15 years. There is a significant gap in this aspect. Additionally, its entire aircraft carrier combat doctrine and the training of officers and soldiers are far behind the U.S. My prediction is that it will take about 10 to 15 years to close this gap. Floods in Henan and Anhui Farmers complain of losing all their money. First, let's focus on news from China. It is currently the autumn harvest season, but Henan and Anhui, two of China's major grain-producing provinces, are being hit by typhoons and flooding. Large areas of farmland are submerged, leading to a significant reduction in corn production, with some areas facing a total loss. However, due to the sluggish breeding industry, corn prices are low this year, leaving farmers lamenting that they have lost all their money. Affected by typhoons Beijia and Prasang, Anhui, Henan, and other areas have been severely impacted, and farmers have suffered heavy losses. Farmers in Shangqiu, Henan, revealed that most of China's corn is used for livestock breeding. Due to the slowdown in that industry, the corn market has struggled this year, and the price of flood-damaged corn is even lower. Mr. Wang, a farmer from Shangqiu, Henan, said, Corn pulled out of the water isn't even worth 50 cents, while good corn goes for 80 cents per pound. Food is worthless. Chinese people have no say, no pricing power. On top of that, prices for fertilizers, seeds and pesticides have all gone up. It used to cost 60 or 80 yuan per mu, but now it costs 100 yuan. This year's corn harvest is a total loss. The yield is down, and it doesn't even cover the cost. Farming doesn't make any money. Where is our way out? Farmers in Shangqiu said that corn has suffered from multiple disasters this year, first drought, then floods, and now typhoons during the harvest season, leading to significant crop losses. Many farmers are left with nothing. Zhang Fan, a farmer from Shangqiu, Henan, explained, This year, the three key stages of corn cultivation— seeding, pollination and harvesting—all failed. The harvest wasn't good, and many grains were lost. Some of the corn wasn't flooded, but the pollination was poor, with only one kernel on each cob. Many elderly men and women were crying in the fields. They were counting on this small piece of land. Farmers in Anhui also revealed that northern Anhui experienced drought first, followed by floods, leading to reduced harvests while costs continued to rise each year. Farming no longer brings in a profit, and many feel hopeless about working elsewhere. Li Jin, a farmer from Bozhou, Anhui province, shared, I just harvested my corn. Some of it was flooded or moldy, so the price was low. The good corn sold for over 80 cents per pound. I earned 400 yuan per mu. I was heartbroken. I lost everything. A bag of fertilizer now costs 400 or 500 yuan more than before, and land rent has doubled from 400 to 1,000 yuan per mu. It's unlikely grain prices will rise. If they do, someone will intervene and we'll have no land to farm. Farmers also noted that in the past, burning straw after the autumn harvest helped kill pests and grass seeds. However, after the ban on straw burning, pests and weeds have increased, requiring more pesticide use, which has driven up planting costs and harmed human health. Mr. Wang, a farmer from Shangqiu, Henan, added, There's something even more worrying. The more fertilizer and pesticide we use, the lower the yield. Diseases are increasing. People aren't allowed to burn straw because they say it pollutes the air. It's all about capital making money while people suffer. Pesticides leave residues. Why do we have so many cases of hemiplegia, cerebral thrombosis, myocardial infarction, cerebral infarction, and cancer in rural areas? Unheard of diseases are appearing and they're affecting people at younger ages. On August 30th, the Chongqing-based chip giant Xiangdi Xian held a general meeting to announce the official dissolution of the company, resulting in the immediate termination of contracts for over 400 employees. The news sent shockwaves through the industry. However, Xiangdi Xian later issued a statement clarifying that the company was merely restructuring due to pressure, not dissolving. Some scholars believe this clarification is an attempt to suppress the news and prevent market panic. In recent years, the Chinese Communist Party has heavily supported the semiconductor industry, but survival has become increasingly difficult in the face of tightening U.S. chip bans. Xiangdi Xian, established in 2020 and often referred to as China's NVIDIA, had previously launched two GPU products, Tianzhen No.1 and Tianzhen No.2, and at its peak, the company had a market value of 15 billion yuan. The sudden dissolution of the company marked it as the latest Chinese semiconductor unicorn to go bankrupt. According to Chinese media reports, Xiangdi Xian's management revealed at the meeting that the company had signed a B-round of financing agreement worth up to 500 million yuan with an investor, but ultimately failed to reach an agreement, leading to a shareholder lawsuit. As a result, the company's accounts have been frozen and no new funds can be injected. Australian-Chinese scholar Zhang Xiaogang commented, With the U.S. and other Western countries imposing numerous restrictions and decoupling from China, in terms of technology, it has become increasingly difficult for the CCP to obtain advanced products and technologies, making it even harder to keep up. This has severely limited the number of downstream customers, leaving companies like Xiangdi Xian in a very difficult position. On September 1, Xiangdi Xian issued another statement, asserting that while the company was under market adjustment pressure, it had not taken steps to dissolve or liquidate. Zhang Xiaogang added, Although the authorities have praised China's rapid business development compared to last year, many people notice the increasing number of closed shops on the streets. Whether Xiangdi Xian has truly dissolved or is merely suppressing the news to avoid market impact, the situation reflects China's current economic difficulties. Lan Xu, a U.S.-based commentator, remarked, China's technology industry faces not just technical challenges, but systemic ones. The CCP's strategy of using high technology to threaten global freedom and democracy will inevitably face resistance from the free world, preventing these industries from achieving the CCP's dream of overtaking global leaders. Bloomberg reported, based on sources, that the Dutch government plans to further restrict exports of chip manufacturing equipment to China from ASML, a leading Dutch company. On August 30, Dutch Prime Minister Dick Schoof stated that the Dutch government will consider ASML's economic interests when deciding on further tightening export restrictions.