Street vendors revive China’s economy in the aftermath of Covid-19
Feature photo: “Street-store economy” initiated in Chengdu is believed to have created more than 100,000 jobs in the city within two months. (Image source: Sina Finance)
For most street vendors in China who are used to being driven away by municipal police officers that try to keep the streets “tidy and clean”, being called by an officer asking them to reopen their business on streets sounds like a scam.
But this time, it’s truly not. The measure, known as the “street-store economy”, was initiated in the Southwestern city of Chengdu in the middle of March, allowing street peddlers to set up roadside booths or food stalls in areas such as streets outside residential compounds and on plazas, where this practice was banned prior to the crisis.
This move is believed to have brought 36,000 street stalls, driven the work resumption rate in the city’s central area to over 98% and created more than 100,000 jobs within a period of two months.
Temporary mobile stall station in Ruichang in Jiangxi province. (Image source: Jiangxi Net)
The initiative was praised by Li Keqiang, the prime minister, saying that the “street-store economy is bringing cities back to life”. Indexes such as “street market and roadside stall businesses” have been excluded from “Civilised City” ranking appraisals for this year, according to government documentation. Nearly 30 cities had already followed their lead by early June.
A 21-year-old university student, who preferred to be called by her surname Ma, returned to her home city of Zhang Jiakou in Hebei province from the UK for the summer holiday. She has set up a table outside the residential compound where she lives since June and has been displaying some of her own beauty accessories to sell. She said that this “business” has helped her make pocket money at an average of 200 RMB (£22.7) every two hours.
Table displaying beauty accessories set up by Ma in Zhang Jiakou, Hebei province. (Image credit: Ma)
Another peddler sells homemade spicy crayfish on a square next to a train station in Beijing. He said that with nine boxes of crayfish, he earned 300 RMB (£34) in three hours on the first day of his business.
The nature of flexibility and mobility of roadside stores has increased the demand for vendor vans. One of the car manufacturers, Shanghai GM Wuling (SGMW), who turned its production line to make face masks when the country was hit hard by the virus, has now started making vendor vans, called “Wuling Rongguang Wings”. The firm’s (HK00305) share price rose by 120% on the day it announced this move.
“Wuling Rongguang Wings” vendor van. (Image source: Shanghai GM Wuling, WeChat)
Other listed companies that fall under the category of the “street-store economy” concept say shares have been the backbone that has driven the stock market.
The economy’s performance seems to reflect the contribution of street businesses. Following a contraction of 6.8 percent from January to March due to the country’s lockdown, China seems to have recovered. With a gross domestic product (GDP) growth rate at 3.2 percent in the second quarter of 2020, exceeding the median forest of analysts poll by Bloomberg, which predicted a growth rate of 2.4% in Q2 2020, it is believed that the Chinese economy has avoided a recession, which is defined as two consecutive quarters of contraction in GDP.
Despite the growth, experts such as Stephen Innes, Chief Global Markets Strategist at AxiCorp, cautioned that Chinese customers will not “go on a spending spree until they feel confident the environment is virus-free”. There are also those who claim that Beijing’s stimulus measures are more manufacturing-focused and the consumer side of the economy is however “a bit more problematic”.
Concerns have also been raised as to whether small restaurants and grocery stores will be affected by having to compete with street vendors. Peng Bo, associate researcher at the Chinese Academy of International Trade and Economic Cooperation said, “There could be some impact on the performance of shops. Online shopping has already largely challenged in-door shopping and cheap street stalls can be more competitive in offering similar products.
“The street-stall economy creates employment, increases opportunities for low-income groups and lowers living cost for the public. It’s actually a last resort to restore the economy in the aftermath of the pandemic.”
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