Ningbo: A Tale of Two Economies Amidst China’s Economic Struggles
Ningbo, a bustling port city located two hours south of Shanghai, is emblematic of the dual nature of China’s current economic landscape. Home to the world’s largest port by cargo tonnage, Ningbo’s port facilitates the arrival and departure of 150,000 ships annually. These vessels transport a vast array of goods, from imported oil and grain to manufactured products destined for global markets. The city’s industrial base, which includes factories producing everything from textiles to electric vehicles, has significantly contributed to China’s record trade surplus in recent years.
However, a stark contrast emerges just a few miles away in the Old Bund historic district, where the impact of declining housing prices is palpable. Once a vibrant area, the Old Bund now faces empty streets and shuttered businesses. The local housing market has collapsed, leading to stalled construction projects and reduced municipal spending. As home values plummet, the middle class in Ningbo finds their net worth diminished, resulting in a significant drop in consumer spending. The once-bustling art galleries and restaurants in the Old Bund are now eerily quiet, with patrons avoiding establishments that were once lively.
Economic Challenges and Declining Investments
The economic challenges facing Ningbo are underscored by alarming statistics. Government data reveals that investments in new apartments, office buildings, and factories fell by 1.4% in 2024, a concerning trend for a city that has long relied on real estate for economic growth. Last year, fixed-asset investment in Ningbo plummeted by 21.4%, a stark indication of the city’s economic downturn.
Local businesses are feeling the strain. Sarah Jin, a manager at a construction materials market, reported a significant decline in sales, with her store’s revenue down by a third. Other businesses in the area have experienced even steeper drops, with plumbing supplies sales down 70% and door sales plummeting by 80%. As local governments cut expenditures in response to the real estate crisis, Ningbo’s municipal spending fell by 5.6% last year, a sharp contrast to the annual increases of 11% to 13% seen in previous years.
Mayor Tang Feifan acknowledged these challenges, noting a lack of follow-through on major industrial projects and ongoing pressure on foreign trade and investment. While the export sector remains robust, local consumption has yet to recover, leaving many businesses struggling to stay afloat.
Resilience Amidst Economic Turmoil
Despite the economic difficulties, some sectors in Ningbo continue to thrive. Export factories are experiencing growth, driven by China’s increasing manufacturing capabilities. Jin’s toilet store, for instance, has managed to perform better than others in the construction materials market, thanks to the rising popularity of high-tech toilets produced domestically.
However, the broader economic landscape remains challenging. The elite class, once known for their lavish spending on luxury goods, has tightened their belts, impacting industries such as high-end tailoring. The production of expensive handmade suits has declined, with many customers opting for more affordable options. Young Liu, manager of a renowned tailor shop, reported a significant drop in orders, reflecting the economic strain felt across the country.
As dissatisfaction simmers among the less affluent residents of Ningbo, the city’s economic struggles highlight a growing divide. Many are frustrated by their financial hardships and the perceived inaction of the government. While the powerful security apparatus in China suppresses public dissent, the voices of discontent are becoming increasingly difficult to ignore.
