A friend recently asked me how the economy in China is doing. He had recently read an article that projected the situation as quite grave with more vacancies than not, failing vendors, etc.
I thought my reply was worth posting here:
On a purely anecdotal level, I don’t see that it has reached the level of saturation the article would have you believe. This is based simply on my own experience in Shanghai and Beijing. I don’t think a true reckoning has happened yet; my educated guess is that worse is coming.
I have seen new buildings that are entirely vacant. Having been in both Shanghai and Beijing, it’s not quite so extreme as the 3:1 ratio, in fact it ostensibly seems like at most 1 in 10 is unocupied.
At the market vendors do mention they are having a slow day. There is quite a bit of foot traffic and sales are happening. They are not offering desperately low prices. While the deals are cheaper than what I would pay in the U.S., I am well above their own cost basis.
In Seattle, Northwest Air has chosen to delay indefinitely opening up a Beijing flight they had bid for and secured. Hainan Airlines, which has a direct Seattle/Beijing flight, has mostly empty seats I hear.
It makes sense that China would be lagging behind the U.S. economy, since we import so much from them. And even in the U.S. the worst has not come yet.