WOOLLEN car-seat covers come in handy during the freezing winters of north-eastern China, giving drivers a plush layer of extra warmth. But as temperatures have plunged over the past month, seat covers that used to fly off the shop shelves in cold weather have piled up. At the Wu’ai Market, a wholesale emporium in the city of Shenyang, Li Xiaoli surveys her showroom stacked high with covers of every description: thick and thin, red and white, patterned and plain. “It’s getting harder for people to earn money, so they are not spending as freely as before,” she says.
Ms Li’s unsold seat-covers reflect a deepening economic malaise in China’s north-east. They stem from a slowdown in car sales that has been exacerbated by a property-market downturn, which has been weak nationwide but especially bad in the north-east. Home sales in Shenyang, the region’s biggest city, fell by 26% year-on-year in the first ten months of 2014. That, in turn, reflected a decline in heavy industry, the backbone of the economy.
The north-east’s provinces—Heilongjiang, Jilin and Liaoning—ranked in the bottom five of China’s 31 provinces for GDP...Continue reading
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