Welcome to the New Town Squares of China

It was my birthday. I was in a big, modernized Chinese city. It was raining. What was I going to do?

“Well, we have some options,” I said to my wife. “We can go to Wanda Plaza, we can go to the California mall, we can go to the Ruijing mall, we can go to the SM mall, we can go to Robinson’s mall, we can go to the Lifespace mall, we can go to the JFC art mall, or we can go and check out that new mall [which just opened up a block between two other aforementioned malls].”

This is the reality of choice in today’s China — a country whose urban terrains had been unabashedly mallified over the past decade.

The island part of Xiamen is a messy assemblage of north-south, east-west streets where nearly every major intersection has a large, modern shopping mall in proximity. They are lined up, one after the other, serving as the flagships of each neighborhood, blanketing the place in an almost unbroken shroud of shopping. There are no less than eight large, enclosed, modern shopping malls within a 15 minute taxi ride from my apartment on the eastern fringe of the city — and most of them didn’t exist just five years ago.

Malls in Xiamen

Malls have taken over the country. They are both used as devices to boost China’s domestic consumer economy as well as catalysts to stimulate growth in new development areas. China now boasts nearly 4,000 shopping malls, and many more are on the way. According to a report by the research firm CBRE, more than half of the malls currently under construction in the world today are in China. For scale, more mall space was added last year in the city of Wuhan alone than in all of the Americas.

While large, trendy malls are certainly still being built in the cores of big established cities, the main locations where new malls are being built are actually in the freshly developing outskirts or in the hearts of new cities that were recently constructed. The current strategy for suburban or new city development in China calls for clearing out a large expanse of land, building a large shopping mall, and then constructing concentric layers of high-rise apartment complexes around it. Mall building is a fundamental piece of China’s urbanization equation.

“There is no doubt that new districts need focal interaction points as a community focus, this used to be the traditional marketplace, today it is the mall,” urbanist and consultant Barry Wilson told me.

This is so much so that some municipalities will require developers to purchase a certain amount of commercial land in new areas as a contingency for being permitted to buy highly profitable residential construction land. This isn’t just to ensure that there will be the proper commercial infrastructure to economically support the communities that are being created or as a way to lure people out to new development zones to buy property, but also because tax is collected yearly on commercial property but only once on the initial sale of residential property. Mall building is also a way of filling the government coffers — in more ways than one.

A prime model of this commercial/ residential development combo is no better shown than by the Dalian Wanda group — which is run by the richest man in China — who puts the shopping mall at the focus of their business model. This is a company that makes money selling real estate — high-rises apartments, etc . . . — and they often strike into newly urbanized areas or in parts of cities undergoing their first wave of modern redevelopment; i.e. places where there is really no reason to ever go or, especially, move out to.

To solve this little problem of urban geography they build these large, fashionable shopping malls at the center of their high-rise developments, which is one of the best marketing pitches a residential area can have. Chinese shopping malls are not only places to shop but are also billboards for their communities. Entire sectors of cities are rated by how good the malls are, and these shopping complexes act as bait to lure people out of crowded urban cores and into the new development areas that local governments and investors are trying hard to bring to life.

The result is “mall towns” everywhere. These self-contained, mall centered communities essentially have everything modern urban China cares to offer, and all commercial or public needs are satiated just an elevator ride and a short stroll away. The typical mall town invariably has a large supermarket, department stores, trendy clothing outlets, electronics shops, places for kids to play, a wide array of restaurants, KTV joints, coffee houses, and sometimes even bars. So you shop at the mall, eat at the mall, play at the mall. It’s an entirely planned, cookie cutter, mono-cultural commercial sphere:

These malls have a virtual commercial monopoly over the neighborhoods they serve. In China, there is no separation between commercial and residential zones, and many malls actually have their own apartment towers rising up out of their roofs and/ or their own complexes positioned around their periphery in self-contained retail/ residential combos. Invariably, outside of this inner zone there will be another ring of housing developments which complete the mall-centered urban cluster. The concept of the captive commercial audience is taken to the extreme here.

Malls in China are not only places to shop but are the centers of social life for the communities that they are built within. Generally speaking, shopping malls are where everybody goes on the weekend, and when you go to them you can almost make a list of the people you know in a particular place and check them off as you complete each stop-and-chat formality. According to China Confidential, two-thirds of China’s city dwellers regularly visit shopping malls, with nearly 41% going at least once per week.

As I previously wrote:

Imagine if you didn’t just go to the mall to shop. Imagine if shopping malls were places full of museum-like exhibits, performances, cultural shows, and places were various groups from the surrounding communities joined together to interact and engage in public discourse. Imagine if malls were cultural centers . . . Imagine if the shopping mall was the only place available for all of the above. That’s quickly becoming the present reality in the New China.

“Going shopping will continue to be an important social experience in China. Opportunities abound for owners to emphasize the community gathering function of their centers and create safe, quasi-public spaces in which people can linger away from their small high rise flats – the proverbial “town squares” for urban China in the 21st century,” Steven McCord from JLL told me.

What is extraordinary about this is that people in China more often than not don’t go to the mall to buy things. With the exception of the hypermarkets, cinemas, and restaurants, Chinese malls often seem more like sponsored social spaces. People go to them on their nightly stroll and to enjoy open spaces to play with their kids, maybe they grab a bite to eat, a coffee, do grocery shopping, or see a movie, but actually purchasing merchandise from the grand majority of the smaller shops isn’t usually part of the routine. While China’s malls are estimated to make upwards of $113 billion per year, most of the business is centered around entertainment, F&B, and the hypermarkets where people buy their daily essentials, not the hundreds of “mall-like” retailers who are renting out the bulk of the store spaces.

“Few shopping bags are typically seen in the run-of-the-mill community and regional centres today, with the number of bags typically in the range of less than 5-10% of the total footfall figure,” states a JLL report.

There is a good reason for this: Chinese malls are ridiculously overpriced. They are generally more expensive than their equivalents in developed Western countries, and they are far more expensive than China’s ecommerce websites. Why would anyone buy something from a mall when they can get it online for 30 – 50% cheaper and have it delivered as fast as one or two days? Anyone walking around a Chinese mall with an armful of bags isn’t going to look wealthy and chic, but like a complete idiot: Why did you buy that here? On Taobao it’s half the price. Malls are often showrooms for online shopping in China.

Apart from a few trendy and highly successful outlets (like H&M and Zara) most shops in Chinese malls either sit as stagnate backdrops on the commercial stage for a while then close down without anyone noticing or they stay mysteriously open for years and years without really ever attracting an observable customer base. Lowering prices seems to always be out of the question. Some famous flagship brands are often given the prime locations in malls rent free in an effort to draw people and lesser retailers in, and these high-end entities tend to use these platforms more for brand promotion than as places to generate sales. According to China Confidential, just 64% of mall owners in China on average claim that their operations are profitable.

I must wonder how long this can last. How can a country continue devoting massive amounts of resources into building massive amounts shopping malls when more and more people have less and less commercial need for them? Are the days of these big malls in China numbered before many are even built and opened to the public?

Will we miss them when they’re gone?

The mall in urban China provides people with a place to go, with a place to exist and interact in the public sphere free of charge. Malls don’t charge admission, you can go there and just hang out with your family and friends for as long as you’d like during the hours they are open. They offer wide open squares and an excessive amount of space where you can stretch your legs and walk without the hassle of dodging traffic, and your kids get a relatively safe place to roam and play. Shopping malls provide the matrix for social cohesion in modern China, and this is their true value.

“Modern urban developments in China tend to be identical: large scale, monotonous environments which are car oriented and hard to navigate by foot,” said Daan Roggeveen, the founder of MORE Architecture. “The shopping mall is at the heart of these developments, with the mall becoming the new public space for neighbourhoods.”

I had to admit that I appreciated the fact that on this rainy day in May I still had a place to go.