Why Are Chinese Malls Closing?

Reuters: A China twist: why are malls closing if consumption is rising?
Rising vacancy rates and plummeting rents are increasingly common in Chinese malls and department stores, despite official data showing a sharp rebound in retail sales that helped the world's second-largest economy beat expectations in the third quarter.

The answer to that apparent contradiction lies in the rising competition from online shopping and government purchases possibly boosting retail statistics. Add poorly managed properties into the equation and the empty malls aren't much of a surprise.
Chinese cities are constantly building new shopping areas. Aside from a city such as Beijing, which is already built out with prime shopping areas such as Xidan, the competition and drive for new properties is intense. In Wuhan, Han Street Outdoor Walking Plaza & the New Wanda Mall Complex (汉街) has attracted new business, as has Wuhan Tiandi in Hankou. The older areas are like drive-in movie theaters, bowling alleys and roller rinks in the U.S. Once popular destinations eclipsed by a new generation of consumption patterns, the difference being the level of investment and time to change. The malls are expensive and consumption patterns sometimes shift inside of 10 years, if not faster.
A joint report by the China Chain Store Association and Deloitte showed that by the end of this year, the total number of China's new malls is projected to reach 4,000, a jump of over 40 percent from 2011.
In some cases, the new malls will be category killers that create new traffic patterns. In other cases, they will be the failed investments.

The situation with the malls reminds me of the ghost cities. China builds much faster than the demand, but for many years the demand showed up eventually. Common sense and experience told you they wouldn't change their behavior in time, one day they would build ahead of demand and demand wouldn't materialize.

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