Here is an interesting
translation of a Chinese article regarding
textile work and vacant cities in China. My
"China Friend" who wants to remain anonymous
writes ...
Hello Mish
In Yangzi Delta Region alone, there are dozens
of so called “International Garment Cities”.
These cities are built under the direction of
a local government investment plan. In many
cases, huge parcels of land are sold to real
estate developers, who promote the sale of
individual shops which are to be built inside
the garment city. The marketing material often
carries the promise of “ high investment
return” and “developer will rent” to lure the
retail investor from all over China.
However, many so called "garment cities" are
very poorly positioned. Moreover, they are a
hybrid of department store, factory outlet,
distribution center, and many of them have a
50% vacancy rate or higher due to the over
expansion in this sector.
The Hua Xia Times, published an article on the
World's No1 Fabric City and the financial
problems of
Wuxi New World Department Stores under
tremendous stress with investors calling for
cancellation of contracts.
There are total 6000 shops in New World, but
more than 3 quarters are vacant. Thousand of
retail investors now are demanding the return
of the investment from local government and
developer.
The 4 billion RMB New World Investment Project
began construction in 2004. Now it is a total
disaster with very thin customer traffic to
generate enough cash flow to pay the shop rent
alone.
In Shanghai, Wuxi, Suzhou Area alone, there
are dozens of similar so called “ Fabric
Cities”, such as Wuxi Orient International
Fabric City, Shanghai Sutong International
Fabric City, Shanghai Yangpu International
Fabric City, Shanghai Fengjing Fabric City,
Wujiang International Fabric city, Changshu
International Fabric City, Shuzhou Xiangchen
International Fabric City, Gaoyou Huang
International Garment Trade City, total
investment exceed 30 billion.
Besides “Fabric City”, you can find
“Electronic City”, ‘High Technology City”,
“Tourist City”, so on and so forth, all are
investment frenzy built to drive local GDP
growth , but in reality, GDP is construction
GDP only.
Once again, US
perception of China vs. what is really happening
in China is far off the mark.
