Financial Crisis and Shanghai

It may be too late for me to write about the financial crisis, and its impact to Shanghai (I tried hard to avoid to use too big terms like China – basically, I only know a very small portion of the city of Shanghai, not to mention about China).

Shanghai IS Impacted

Despite of many claims that China is fine so far, I clearly feel the arrival of winter, or at least approaching of financial winter.

Taking Wendy and I as an example, although we are not directly impacted, the sentiment of being more conservative surely impacted us. We have canceled almost all the movie expense, and cut our dining out to once every week (before, it was once once every day or twice per day).

For layoffs, recently, I started to see signs like this. The winter has clearly impacted some higher risk companies, like Internet companies. It is not surprising to know friends leaving their company, and I feel very bad about it, and also, it is almost inevitable in this environment.

Role of Controlled Media

It is interesting to see the role of media in financial crisis. If you open all the major newspapers, and websites, the theme of all the news is: We face challenges, but everything is still fine, and at least it will be fine. For the majority of people who rely on the limited source of information, they are more optimistic than they should be, and ironically, this is a good thing in this era. The current economy is all about confidence. If majority of people are still confident (or blindly confident) about future, maybe the situation won’t go as worse as it should be. In the US crisis, I am sure Internet plays an important role, that everyone knows the bad news, almost at the same time.

I will still keep an eye about what is happening here in Shanghai, and if you have any specific questions about what the real situation is, feel free to ask me, and the questions help me to observe what is happening around me better.

9 Comments

  1. I am not sure about Shanghai but I know that some friends, working as software engineers, have been laid off by several international software or telecom companies in Beijing. Others are still living under the fear of losing their jobs.

    So you can say ‘Beijing Is Impacted Too’.

  2. The number of people out shopping in Carefour seems to be down signficiantly… hasnt rebounded after the holiday as normal…

  3. RWM, yup…

    Not just Carrefour. I notice the traffic in eating places and mall also has less people.

    Soon, might see more people taking the public transport to reduce cost of driving on the road. Good for the environment :P

  4. This Financial Crisis just like a coin which has two sides .We need some time to change the

    formal thinking ways, and we may find some fresh ideas which we ignored before on the road .

  5. So why are you eating out less if you aren’t directly affected? Come on, do your bit for the world economy :)

  6. @Herbert, it is all about sentiment – people naturally tend to be conservative when the climate changes, although it is not directly impacted yet. It is all about expectation about the future.

  7. Personally I’ve noticed that rents in the more foreign areas are dropping and I’m not even talking about the incredibly overpriced places that were articifically inflated before (15K & up). Around Jing’An, the French Concession and Xintiandi, places that were 7500-9000 a year ago have already fallen to 5500-8000 and places that were 5500-7500 are now around 4000-6000 and I’ve even seen apartments listed in the 3000s – something that never happened on the “foreign”, English-language, classifieds. (In case you’re wondering, I’m talking about craigslist). They will only fall more as more and more expats return home after losing their packages and apartments sit empty for a few months – I’m glad my lease is up in June – I will easily save 2000RMB simply by moving to another, similar apartment in the current market!

  8. Hi,

    how is the apartment price nowadays? When I was in Shanghai last summer, it looked like a newer 100 m2 apartment in a close in location (around Minsheng Lu on line 6, the Hello Kitty line!) was about 1,700,000 yuan. ($250k). How about now? I heard that the price in Shenzhen fell a lot, but that Shanghai did not fall so much. Of course my Shanghai sources could be biased!

    Good luck to all.

    Greg

  9. I was thinking of looking up some of them newspaper websites, but am glad I came here instead. Although glad is not quite the right word… let me just say I needed this after the incessant chatter in the media, and am grateful to you for articulating something many of us are feeling – even from distant shores.

    trading

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