Welcome to the great malls of China

The news that China is now more popular around the world than the US, according to a Pew Research Centre survey, is just the latest Chinese ...

The news that China is now more popular around the world than the US, according to a Pew Research Centre survey, is just the latest Chinese challenge to the American ego. The Chinese are also buying US businesses with hallowed American brand names, such as IBM (its PC unit), and they’re bidding for Maytag and Unocal. They’re making a lot of what Americans wear, use and buy. And they’ve even surpassed us in the most characteristic icon of American life: the shopping mall.

The Mall of America in Minnesota has been the biggest in the US for more than a decade. But this year the largest mall in the world is the Golden Resources Mall in Beijing, and it will soon be eclipsed by the South China Mall. There are now four malls in China that are bigger than the Mall of America. By the end of the decade, China is expected to have at least seven of the world’s 10 largest shopping malls; it has 400 malls now. In the US, mall construction is steadily declining — from 35 major projects at the turn of the 21st century to just eight projected for 2004-06. Of course, the US has a half-century headstart and China’s vastness is mostly devoid of malls. But this trend does suggest a few things. China has become one of the world’s primary producers of retail goods, based partly on its ability to undercut prices with cheaper labor. Yet there is so much money flowing into China that a consumption economy is growing fast.

Chinese producers are supplying cheap consumer goods sold in the US, resulting in a huge trade imbalance. As Long Beach communications director Yvonne Smith told PBS’ Frontline, ‘‘China is doing the manufacturing; the US is buying it.’’

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Meanwhile, the middle class that once filled America’s malls is declining. The US mall industry anticipated a splintering middle class in the 1980s, responding with fashion malls for the better-off and emphasising entertainment to attract what was left of the mass market. Then Wal-Mart came along and stole the growing low-price consumer market, becoming the world’s largest retailer as well as China’s best customer. That relationship helped accelerate the loss of US manufacturing jobs. So what was once unheard of is now becoming more common: US malls closing down.

In China, an increasing number of consumers can go to American-style shopping malls to buy products with US brand names that are made in China. To some, the spectre of a Communist country spawning so much business enterprise so successfully seems ironic at best. Others point to all this commerce as the final, if unacknowledged, triumph of capitalism over Marxism. But the lessons learned may be a little different.

The US has managed to avoid widespread conflict over economic inequities by making sure that, even though many people can’t afford healthcare, retirement or higher education, with an extra job or two they can still afford to shop for Chinese-made goods. The Chinese may be learning that this method of pacifying the population is not such a bad idea — shopping may be the true opiate of the people.

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