Pointless Continual Re/Building

[Horse]

This has been bothering me for some time. It seems the process where builders take months to gut a building and renovate it, only to open some ridiculous shop which is clearl y going to fail, shut it down after 3 months of no customers going inside, and then do the same thing again is totally ridiculous. It's also really disruptive for people living anywhere nearby, and is putting a lot of brickdust into the air.

So why are Chinese people so intent on opening absolutely pointless enterprises that are doomed to fail? Am i being really naive and this is all a money laundering scheme (as I have heard) or are some Chinese people just really shit at understanding what consumers want? Either way, it is pretty mad.

Case in point. The Korean boy i tutor had his life and study totally disrupted for 3 months while they renovated the space on the ground floor. It then opened as an extremely expensive winery shop. Obviously not 1 person went in, it has now been shut down and is being noisily refurbished. It is literally a constant cycle of failed businesses.

So what is going on?

[crazy-meiguoren]

Good question. If a country is so crowded that it is telling its citizens how many children they can have, it ought to complete the cycle by utilizing its space more wisely.

[gougou]

why are Chinese people so intent on opening absolutely pointless enterprises

Overgeneralizing just a bit, aren't we?

I've seen what you're talking about occasionally, but the majority of shops in my region haven't changed throughout the last year or so. What percentage of the shops around you did?

[Horse]

No, for where I live (Qingdao) it's not a generalization at all. As I stated in my OP, it is literally a constant cycle of renovation and demolition. There are very very few shops which make it past 6 months. I just wondered if anybody had encountered this elsewhere and if they knew what the reasons where.

[jbradfor]

Generalizing, it does seem to be an aspect of Chinese culture to be very entrepreneurial. There seems to be a belief that opening your own business is the path to riches, it's best to be your own boss, but if you're not your own boss it's better to be a manager than a worker (so you are a boss over some people), etc. I've seen in the US, with many of the Chinese I know will, even when they have perfectly good and well paying jobs at companies, start side business, not because they need the money, but because they think they should.

So, bringing this back to the topic, yes, I think there is a big cultural push to have people open their own business because they think they "should" open a business. And, because of that, I think the failure rate is quite high.

[taylor04]

I always think its funny how if a business succeeds, two of three more pop up in the area. If those succeed, more pop up. I have seen loads of hardware stores all in a row, go 3-4 blocks and there are none, same thing with music stores and quite a few other businesses.

[Horse]

Yeah, that i can kind of understand as it is an age-old technique of 'cluster selling' the Chinese use, so you have a street full of stationery, one of digital camera, one of bathroom fittings etc.

It seems other people don't really have experience of what I'm talking about. It's certainly something more than a bit of misplaced entrepreneurial spirit.

It's similar to when they spent 3 years digging and building the elaborate 3 Gorges Square in Chongqing, only to dig half of it up less than a year later. This apparently was due to corruption in the selling of contracts (which is standard practice in any major construction work in China).

[gato]

Presumably you are talking about private businesses, so it's unlikely that people are opening the shops knowing that they are going to fail and just want to boost the GDP or have a stake in the renovation contracts.