Stephen McDonell, BBC China Correspondent
8 hours ago
image copyrightJoyce Liu/BBC
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Zibo’s outdoor barbecue provides people with delicious and cheap leisure food.
Zibo, a small city in Shandong Province, is experiencing a boom in outdoor barbecues.
People from all over China come here to sample the famous lamb kebabs, which have become a legend on social media.
It’s a rowdy experience, and certainly not for the faint of heart.
The streets are packed, and you sit on little plastic chairs, drinking beer and wrapping meat in local scallion flatbreads, while karaoke sings in all directions.
At first glance, these groups might seem to indicate that the economy is rebounding strongly from the coronavirus emergency — but according to economists, that is not the case.
They said it was more of a sign that people were looking for a cheap and tasty option amid intense pressure on household incomes.
image copyrightJoyce Liu/BBC
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The mutton skewers and karaoke in the Zibo barbecue restaurant have attracted people from all over the country.
A shirtless man told us that this is an ideal place for him and his family on a hot summer night, and that the cost-effectiveness of this gameplay is in line with current reality.
“This place is very suitable for ordinary people,” he said. “It’s hard to make money these days, but it’s still easy to spend. After three years of the epidemic, the economy is only slowly recovering.”
University graduates in China have been hit particularly hard by the downturn, where youth unemployment has hovered at 20 percent or above.
Some students feel uneasy about their future.
“Yes, I’m worried,” said a graduating girl. “The competition is fierce, and it’s hard to find a job. All my classmates have the same pressure.”
For those with jobs, financial security is a big reason why they don’t want to spend more.
They worry about falling into the ranks of the unemployed, and in many cases, their family’s biggest investment isn’t as valuable as they thought it would be.
China’s real estate industry is under tremendous pressure.
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The hot Zibo barbecue and the vacant Qingdao real estate reflect the reality of China’s economic downturn
To see this for ourselves, we drove a few hours east from Zibo to the outskirts of a much larger city, Qingdao.
Here, the real estate boom didn’t match the real needs of buyers or tenants, and the result was a flood of buildings built with few people living in them.
A woman sells cold noodles at a mobile stand outside her complex with few neighbors.
A few years ago, after her husband moved to Qingdao, he bought an apartment here because he heard that the schools here were good and wanted to give his children a better start.
I asked her if she was worried about the devaluation of her house.
“Of course I’m worried,” she said, “but what can I do?”
A nearby couple who work as street cleaners are stopping for lunch. They pointed to the building behind them and said no one lived there.
Across the road was a small concrete development with unpainted exterior walls and no windows whose frames were worn out from prolonged exposure.
image copyrightJoyce Liu/BBC
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The real estate explosion in Qingdao outstripped the demand of buyers and renters.
“Construction over there stopped suddenly one day last year,” the man said.
According to his wife, the whole neighborhood was pretty deserted. “There’s nothing here, not even a gas station, and you have to walk a long way to get gas. It’s very inconvenient to live here,” she said.
There was hope that this place would take off. At that time, the city hosted the summit of the Shanghai Cooperation Organization, and Chinese President Xi Jinping also personally recognized the investment and business in this place, and it may also become the venue for events such as international expos.
It was thought that there would be factories, start-ups or other companies hiring people who bought homes here, but the truth is, there aren’t many of them.
Property sales in the area have halved in recent years, according to a local real estate agent.
“Prices are falling because the market is saturated,” she said. “Too many houses are being built and it’s hard to sell.”
We put up a drone, and the view from the air was worse than it was from the ground.
All around you can see new developments that have completely stopped work, and the completed buildings are almost lifeless.
image copyrightJoyce Liu/BBC
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The prosperity of China’s real estate has made housing prices in many big cities beyond the reach of ordinary families.
And the supply and demand issues aren’t unique to the region, or even the city. Evidence of the dangers of a property bubble is easy to find in province after province in China.
One of the reasons for the rampant real estate speculation in this country is the lack of alternative investment options, yet the housing boom has pushed prices in many major cities out of the reach of the average household. The government’s response to this is to limit the number of houses that individuals can buy.
It was a genuine attempt at equality reform, but there is now pressure to reverse it. In Qingdao, such measures have been eased in an attempt to provide stimulus to a stagnant property market.
The challenge for Chinese policymakers is to find a way to wean economic growth and business confidence away from this heavy reliance on property sales.
Economists like Harry Murphy Cruise of Moody’s Analytics think China has big problems.
He told the BBC in Australia: “China’s economy urgently needs to be rebalanced. In the past two or three decades, China’s economy has achieved huge growth through large-scale infrastructure construction and substantial growth in the real estate market. However, in the future, this growth will The approach is not sustainable.”
“Looking at the world, advanced economies need the family as a key driver of economic growth, and that’s something China doesn’t have right now.”
From lowering interest rates to cash subsidies, the Chinese government is considering ways to encourage individuals and businesses to spend more.
The problem, however, is emotion.
People feel more secure when there are more jobs. Businesses need to invest to create more jobs, but are unwilling to do so when consumers are so insecure.
As Harry Murphy Crews said: “It’s a bit of a chicken and egg problem. Without business spending, there’s no upturn in the economy. They won’t spend until they see the upturn. So it’s a The deadlock is holding back the development of key parts of the economy.”
All of these issues then have the potential to spill over into global trade.
image copyrightJoyce Liu/BBC
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Qingdao’s beaches, on the other hand, show that tourism is recovering
China is a big country. Ripples from what happens in the world’s second-largest economy will cause waves.
Reduced manufacturing output here—due to weak international demand—results in lower exports, less global supply of Chinese-made goods, and then less business activity in big factories in Asia. Afterwards, the resulting slowdown in China’s consumption means less imports of products from other countries.
The headache for the Chinese government is that it may have to choose between seeking short-term stimulus, which will delay the rebalancing it will eventually need to face, or taking more immediate pain to start the longer-term fix sooner plan.
Naturally, someone in the upper echelon of power in Beijing is almost certain to be considering some kind of middle ground, a small boost to stabilize the economy before considering the larger issues at hand.
Because they know that once negative emotions develop, it may be difficult to turn them around.
However, if you want to feel optimistic about Qingdao, and about life itself, you can go to the beach. Along the famous coastline here, tourism seems to have picked up again.
There was laughter and sand castles built by tourists. From industry titans to truck drivers, everyone here is enjoying the embrace of the sea.
Whether or not this matches reality, here it is almost impossible not to feel that, despite all the difficulties, the future will be fine.
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2023-07-07 08:20:13
