The article highlights the contrasting trends in shopping mall development between the US and China. While the US experienced a decline in the number of malls, with one in six closing since 2013, China saw a doubling of malls during the same period, reaching 6700.
This rapid expansion in China has resulted in an oversupply of malls, leading to decreased customer traffic and struggling retailers. Even major brands like Apple have closed stores in some locations.
The article points to the fierce competition from e-commerce as a significant factor affecting the retail sector, particularly in China where cheap and convenient home delivery is prevalent, facilitated by a large delivery workforce.
China's tax system, which favors malls due to sales tax revenue for local governments, incentivizes continued construction despite a slowdown in retail sales. This has resulted in a building boom fueled by debt, even during the Covid-19 pandemic and its aftermath.
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