THE dejected, shirtless man kneeling this week outside the head office of Country Garden, a troubled Chinese property giant, might easily have gone unnoticed—if, that is, guards had not tried to hide him behind a wall of large, red umbrellas. Still more security guards held up umbrellas to conceal a woman and a teenage girl, sitting on the ground beside the family’s luggage. Others blew whistles at anyone taking pictures.
Across the road, Chaguan, who stumbled on this quiet human drama by chance, was briefly joined by three riot police in combat boots, who glanced at the foreign reporter, then left. Asked later why this family came to Country Garden’s headquarters in the southern city of Foshan—and what happened after the trio was led into a police post—staff at the firm explain, regretfully, that colleagues who could provide an answer are on annual leave.
As it happens, small, non-political protests are common in China, as citizens seek to embarrass companies or arms of government into addressing their grievances. Demonstrations grow more frequent in times of economic distress. In recent months, as China’s property sector has slid again into crisis, many have involved homeowners who pre-paid for apartments that have yet to be finished. In faraway Beijing, the Communist Party’s ruling Politburo has ordered developers and officials to ensure that promised homes are delivered. Meanwhile, in provincial cities and towns, persistent protesters risk police warnings or detention.
As China’s economy slows, all sorts of moves to hide bad news are growing obvious. The statistics bureau stopped publishing a consumer-confidence index after April numbers fell to levels last seen during the depths of the pandemic. With youth unemployment climbing remorselessly, the same bureau stopped reporting that statistic this week, saying it is reviewing how to count jobless young. Analysts face pressure to be positive. Alas, as with those clumsy, umbrella-wielding guards, such concealment only draws attention to China’s woes.
A number of grim statistics have been made public in recent weeks. These show a sharp fall in new bank loans (despite lower interest rates), disappointing retail sales and fewer property transactions. Compounding domestic gloom, exports are down, too. The common link is a collapse in demand, at home and abroad.
Foshan, a commercial hub of 9.5m people beside the southern megapolis of Guangzhou, is a good place to see a property-driven slowdown on the ground. As well as hosting Country Garden’s head office, Foshan is China’s furniture-selling capital. Outlets include the Louvre, a gleaming mall whose tenants sell leather massage chairs or ornate desks for 30,000 yuan ($4,110) each. Salespeople talk of boom times, five or ten years back, when Chinese families invested savings in multiple properties, and needed to furnish all of them. The best customers from the richest cities, such as Beijing or Shanghai, still have money to spend. But the pandemic struck a heavy blow, notably in mid- to low-status provincial cities with an oversupply of apartments. Customers without money “don’t dare enter” the Louvre, says a woman selling hardwood tables for tea ceremonies. In the past clients bought “on impulse”. Now they compare prices on the internet first.
Beginning in the summer of 2020, after China beat back its first pandemic wave, the economy seemed to be shielded by strict zero-covid controls, recalls a woman selling furniture with a 1950s retro feel. But as the pandemic dragged on, she watched customers cancel orders and rethink home-renovation plans as their own businesses suffered. Now, post-pandemic caution “makes people spend conservatively”.
Over strong black tea, the co-owner of a small delivery company recalls how “lively” customers were in March and April, after covid controls were lifted. What he calls that spending “craze” wore off, though, and people now need to work and earn more. Delivery rates to Zhengzhou, a central city, have dropped to 1.5 yuan per kg, down from 1.8 yuan before the pandemic, he sighs.
Domestic tourism surged after the pandemic, says a worker in a warehouse filled with cheap furniture for hotels. “Everywhere is full of people, at least.” But crowds are not spending as they once did, she says. “A lot of people don’t have that much cash on hand.”
Foreigners remain a strikingly rare sight in most of China. Furniture buyers from India, Africa and Arab countries have begun returning to Foshan, but they are not seen as big-spending saviours. They want bargains, says a woman selling marble-topped tables. Indians want designs that Chinese people favoured in the 1990s, she confides, a bit witheringly. Out of her hearing moments later, an Indian trader assures Chaguan that customers in India like modern, minimalist furniture, “not this Chinese style”.
A party ill-suited to fixing this problem
It is easy for outsiders to underestimate the housing wealth of many urban Chinese. A saleswoman talks with relief of buying a flat in Foshan a decade ago when it was “cheap”. She is not wrong: local prices have almost doubled since 2013. In the 1990s tens of millions of urban Chinese bought subsidised flats from state employers for less than a fancy table costs now at the Louvre mall. Some are worth 50 times as much today.
That same sense of security is out of reach for those yet to buy. A migrant from Jiangxi, a poor inland province, considered buying a flat in Foshan last year. The local government has reduced the minimum mortgage deposit for first-time buyers to 20%, lowering one barrier to ownership. But she is not buying now: her income is not stable and she is saving for accidents or health crises. In her early 30s, she has never known life to feel so uncertain.
Foshan reveals a China sunk in gloom. That is a puzzle for a party obsessed with control. Bad news can be censored and the unhappy hidden from view. Policies can be imposed. But no ruler can order people to feel confident and spend. ■
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
