Washington - The world's largest shopping centre looks almost deserted. While schoolchildren ride the sidewinder and roller coaster, there are few shoppers and fewer tenants at South China Mall in central Dongguan, a city of 6 million people situated north of Hong Kong.
"They did this mall all wrong," says Stephen Liu, a Hong Kong businessman visiting clients in Dongguan, who came by to see the place for himself. "They never found out if there were enough people to fill it. All the Chinese in this town are factory workers, they can't afford to shop here."
That's a problem for more than just the mall's owners. South China Mall stands as a symbol of China's failure to stimulate more spending by its 1.3 billion people and to curb runaway investment in property projects. The result is a record $232.5 billion (R1.6 trillion) trade gap with the US and increasing concern about unsustainable growth at home.
A walk around the mall's 89 palm tree-lined hectares takes a visitor past an indoor amusement park, replicas of seven cities including Venice, Milan and Amsterdam, a 26m model of the Arc de Triomphe and a 2km long artificial river with gondolas for hire. There's retail space for 1 500 stores, only a handful of which are leased.
The mall's developers expected to attract 100 000 visitors a day, the number it would take to keep its vast shopping areas from looking deserted, according to Ian Thomas, whose Vancouver-based firm was retained to help with leasing and marketing. Instead, more than a year after it opened, the mall gets only 10 000 a day, says spokesperson Joanne Zhu. That leaves its open-air pedestrian streets almost empty.
"The mall is going through a development stage now," says Grace Liu, a public relations officer. "Its current performance doesn't mean it won't do well later."
The crowd today seems to consist primarily of teenagers here for the rides or to socialise. There are a few workers on lunch break at the McDonald's and KFC restaurants.
Huang Xiaoyan is treating herself to a meal at McDonald's, but says she won't be spending money on anything else.
Typical of many Chinese workers, Huang doesn't spend much of the 1 500 yuan (R1 377) she earns each month doing accounting work for a local factory. She lives in a company dorm, eats in its cafeteria, sends much of her income home to her parents and saves the rest.
Huang's frugality exemplifies the challenge facing Chinese officials as they seek to quicken the pace of consumer spending relative to investment and exports. China's economy now is "unstable, imbalanced, uncoordinated and unsustainable", premier Wen Jiabao says.
Private consumption in China, the world's most populous nation and the fourth-largest economy, accounts for just 35 percent of gross domestic product, about half the share in the US and "quite possibly the lowest consumption share of any major economy in modern history", according to a report by Morgan Stanley.
The Chinese save about half their income. Job cutting at state-owned companies, which once provided lifetime employment and benefits, has eroded income security. An inadequate social safety net requires Chinese to save for retirement, healthcare and their children's education.
Over the last few years, hundreds of malls have popped up around China, which now claims seven of the world's 20 largest. Two of those, Oriental Plaza in Foshan and Grandview Mall in Guangzhou, are within 80km of South China Mall.
South China Mall's 891 000m² makes it more than twice the size of the biggest US shopping centre, Mall of America in Bloomington, Minnesota. "It's Disneyland and Las Vegas come to China," says Thomas, the chairman of Thomas Consultants. "They rushed to build and open it. They honestly thought that by building it, they would come."
Colour Eighteen, a Hong Kong owned clothing store, is offering a 70 percent discount on all items. Four salespeople stand waiting almost desperately to serve customers, though there are none.
Away from the few stores and restaurants near the entrance, the mall's three levels of retail space are a ghost town. Aluminium shutters cover most storefronts, which appear never to have been occupied. A few, now padlocked, show signs of former tenants, with dusty cardboard boxes inside full of unsold athletic equipment, T-shirts, handbags and shoes. An Imax cinema, meant to be a key attraction, never opened, though posters still hail a grand opening.
The one store with customers spending money is a Spar hypermarket that sells groceries and inexpensive clothing and housewares. This store appears to account for the majority of actual shoppers at the mall. Most load up with groceries and leave, never venturing further to take in the sights of Paris, Milan or Hollywood.- Bloomberg