In the face of a challenging business environment, China's stock market stands precariously at the epicenter of intensifying geopolitical storms. Key factors like Beijing's widespread espionage clampdown, regular military exercises in the Taiwan Strait, the Western countries' push for economic decoupling from China, and technology sanctions have collectively driven foreign investors to withdraw from China, seemingly at any cost.
A report released on September 19 by the Shanghai-based "American Chamber of Commerce in China" (AmCham) stated that U.S. firms' confidence in China is plummeting. 40% of U.S. businesses are either planning or have already begun shifting their investments away from China to other nations—a 6 percent increase from the previous year—with Southeast Asia emerging as the top alternative destination.
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Unfortunately, the prediction was accurate. Let's take a look at the latest developments in the city.

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The May Day Golden Week used to be one of the peak seasons for real estate sales in China. However, this year's May Day holiday saw extremely quiet sales in property sales offices and second-hand housing transaction venues, with very few transactions taking place. Even first-tier cities like Beijing and Shanghai were no exception. For example, Beijing's newly signed contracts for commercial residential properties were only 114 units, with a transaction area of only 14,000 square meters. This represents a decrease of over 60% compared to the same period last year, when Beijing was almost under lockdown due to the pandemic.
The market conditions are poor, and developers in urgent need of capital have to find ways to promote sales, with price reduction being the most effective method. However, under the rule of the Chinese Communist Party, it is not solely up to the real estate companies to decide on price reductions. Recently, a major news story emerged in the Chinese real estate industry. Two property projects in Kunshan City, Jiangsu Province, significantly reduced prices by 30% during the May Day period. As a result, the developers were fined heavily by the local housing and construction bureau and their online signing business was suspended. The real estate companies were required to rectify their actions, which also meant they were not allowed to engage in selling activities for awhile. The explanation given by the housing and construction bureau was that unauthorized price reductions disrupt the market and make it difficult to sell neighboring properties. Such unauthorized price reductions are considered dishonest and lack integrity, and have been officially documented as a misconduct in the annual integrity file!
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Since the outbreak of the pandemic in mainland China, the economy has been in a standstill, with news of massive salary cuts for civil servants, teachers, and public-sector employees beginning to surface in 2020. In June 2022, Chinese financial news website Caixin.com reported that civil servants across many eastern coastal areas of China had been hit by a wave of salary cuts. Various self-established bonus subsidies were cancelled, with civil servant salaries being reduced by around 20 to 30 percent. The report indicated that civil servants in Guangdong, Zhejiang, and Jiangsu were severely affected. A section-level cadre in Longhua District, Shenzhen, estimated that their income would be cut by more than 20 percent. Previously, with bonuses and subsidies, their annual income could reach about 370,000 yuan. In Southern Jiangsu, a deputy section-level cadre experienced a salary cut of approximately 25%, reducing their take-home pay by about 100,000 yuan. Meanwhile, a grassroots section staff member in a town in Ningbo, Zhejiang, had their bonus, which accounted for 40% of their income, completely cut off.
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As China's economy continues to decelerate, there has been a dramatic decline in consumer spending. During the National Day holiday in October, which is typically a peak shopping period, there were actually many instances of empty department stores.
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This year's Double 11 shopping festival was the worst for small and medium-sized merchants, with those ranked in the top 20% barely making a profit. Several merchants on Taobao and JD.com revealed that during Double 11, some only earned as little as 350 RMB, with the highest earning only 1200 RMB. ($164)
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