Tariffs Crush Beijing: Businesses Flee, Factories Collapse, Millions Displaced

Beijing is reeling from tariffs. Businesses flee, factories shut down, and millions leave. It's all covered in today's China Truths. I feel like there is almost no one in this shopping mall. Looking at each floor, it is brightly lit but deserted. I feel like there are more employees working in this mall than customers. From the big shopping malls to the small 2 yuan shops, there is no escape. Now they are all closed. Look, even such big shopping malls have to close. Why close? They can't do business anymore. Before, when I had nothing to do, I would just walk around the streets. No matter how big the shopping mall was, there would always be people stopping by. No matter how small the shop was, there were always customers coming in and out. Next to this mall is the subway station, a place with a prime traffic location in Beijing. I remember back then it was hard to find a booth here. Even if I wanted to do business here, I still couldn't afford to rent it because there was no more space. U.S. President Donald Trump launched a tariff war against the Chinese Communist Party, imposing heavy tariffs of up to 245% on Chinese imports. This caused a sharp decline in container shipments to North America. As the Sino-U.S. trade war escalated, the global supply chain was disrupted, leaving deep cracks in key economic hubs like Beijing. The exodus of foreign-invested enterprises from Beijing has become an undeniable phenomenon. Once a top destination for multinational corporations, Beijing now sees a series of closed offices, idled factories, and for-lease-and-transfer signs appearing all over commercial districts. Millions of unemployed people have left the city, from technical workers in high-tech parks to small traders in commercial districts. The sight of once-bustling streets now deserted and gloomy is a clear testament to a Beijing that is losing its vitality. Beijing's current situation is hard to believe. Many large companies are cutting staff and wages, and small businesses are on the brink of bankruptcy. A friend of mine, after years in Beijing, told me she and her husband were returning to their hometown. She said last night was their final meal in the city. Shocked, I asked how they could adapt. She explained that with a 5,000 yuan mortgage, low wages, and job insecurity, they could barely make ends meet. They wanted to sell their house, but prices are falling, and even if they find a buyer, they'll still owe the bank hundreds of thousands. Experts claim people are just tightening their spending, but that's not the reality. Most people, including myself, are struggling with little to no money left after paying off loans. This is the current situation we face. Recently, nine unusual phenomena have appeared in Beijing. After the new year, many people did not return to Beijing. This is the current situation of this city. Remember, there must be a reason for any unusual story. First, at 6.30 in the morning, you can hear the continuous sound of collisions and chatter. Many young office workers bring lunchboxes and line up to reheat their food. Maybe they are boycotting food ordered from outside because of food safety concerns. Cooking for themselves is more secure. Second, once-bustling areas in Beijing such as Sitanjie City or the shopping malls in Guangzhen are now deserted. Previously, it was extremely difficult to rent a space. Now, there are signs for rent or transfer of stores everywhere. Running a physical store is becoming more and more difficult. Many people are leaving Beijing to return to their hometowns and have no intention of coming back. This has also caused rental apartments in Beijing to become deserted. Many landlords have to take losses, struggling to survive. And next year will be even harder than the previous year. Third, food delivery drivers on the road are reckless, ignoring red lights. The number of female food delivery drivers has also increased. However, the total number of orders has decreased, and only the foundations continue to make huge profits. The technology car service has also exploded, but driving all day only earns more than 200 yuan. After deducting the cost of renting a car or paying off debts, there is not much left. I concluded that the main reason for Beijing's traffic jams is the number of technology cars, taxis, and traffic accidents on the road. Fifth, everyone knows that housing prices in Beijing are unreasonably high. Now, housing prices are constantly falling. Every day, there is no lowest point, only lower. Sixth, the number of shopping malls opening is also increasing. But there are also many closures. Many big brands have withdrawn from Beijing. In the past, shopping malls were crowded everywhere, but now most of them are deserted, giving a desolate feeling. Competition between industries in Beijing is becoming increasingly fierce. Many shops complain that business is more difficult than before. Even barber shops now offer quick haircuts for just over 30 yuan. Many have turned to selling goods during the summer to make a living. Eighth, finding a job in Beijing is getting harder. It is almost impossible to find a job with two days off on weekends, insurance, and benefits. One day off a week is considered lucky. Many university graduates have not found work yet. Many seasonal workers are also unemployed this year. A normal job with a salary of 4,000 to 5,000 yuan is considered good, not as high as imagined. Many companies are also quietly cutting staff. Ninth, office buildings in Beijing are now half-empty. Many companies are moving out of these buildings, and there is a trend of shared workspaces. Like before, several logistics companies rent the same store. Making money in Beijing has become harder for ordinary people, with only a small number still thriving. It feels like there are fewer people now, even in big cities where areas that were once crowded are now deserted. Some say the countryside is also emptier, and people are leaving small and medium-sized cities. The question arises, where have all the people gone? Around 2016, the rent in Wangjing was 15 yuan per square meter, but now it's dropped to just 3.5 yuan, with vacancy rates nearly halved. Once home to major companies like Alibaba, Momo, Meituan, and 58.com, Wangjing has been hit hard by the US tariff war, leading to layoffs, pay cuts, and bankruptcies. It's now a symbol of the internet industry's crisis. What we miss is not Wangjing's past prosperity, but the era when everyone had the chance to change their destiny. When goods cannot be exported, and businesses are stagnant, millions of workers face unemployment, no income, and difficulties in life. With incomes dropping, people began to tighten their spending, buying only the most essential items, causing serious impacts on consumer and service businesses. Among them, the restaurant industry was one of the hardest hit. Restaurant owners could no longer afford to maintain operations, had to cut staff, or stop operating completely. Spending on food services dropped sharply as people prioritized saving over spending on extravagant activities, making Beijing's economy more gloomy and stagnant than ever. I live in Beijing, and not long ago, my family's small noodle shop in Huilongguan district officially closed. It was a sad but not unexpected decision. Many people asked me, is it still possible to do business in the food industry in Beijing? I dare not answer with certainty, but I can share with you what we have experienced as both a lesson and a warning. My family moved from the countryside to Beijing to start a business. My parents opened a small restaurant, and my husband worked in the internet industry. We were both owners and customers. However, we quickly learned that the food business can become a bottomless pit if not managed carefully. The economy has been struggling in recent years, and most people's income has dropped significantly. With rising costs, including rent, employee salaries, and materials, the food business can quickly turn into a financial burden. As other businesses around us closed, it became clear that a strange phenomenon was occurring in China. It seemed like overnight, people stopped eating out. Restaurant owners complained that customers were either cooking at home or turning to food delivery apps, where orders were also dropping. Even major cities like Beijing and Shanghai saw a loss of customers, many of whom returned to their hometowns. However, those returning found their hometowns just as deserted, with shopping malls resembling ghost towns. What is even more bizarre is that from Beijing's Guomao Commercial District to Hangzhou's Pinchang Industrial Park, from Shenzhen Science Park to Wuhan's Guangzhou, every city is reenacting the same scenario. Millions of people have mysteriously evaporated. Data from a platform shows that the frequency of consumption at restaurants nationwide has dropped by 36.8 percent, while the amount of household cooking ingredients increased by only 5.7 percent. The more you calculate this, the more terrifying it becomes. Where do people who don't eat out, buy ingredients, or order food go? Not only the food and beverage industry is suffering, but all other industries in Beijing are in a dire situation, having to cut staff and reduce the scale of operations. Large and small companies, and even small retail stores, are struggling with a lack of customers and declining revenue. Thousands of workers are facing job losses, causing the unemployment rate to rise. Many Beijing residents lament that the city is now strangely deserted, no longer bustling and crowded as before. The streets, markets, and shopping areas, which were once the centers of economic and social activity, have become quiet and deserted. Walking on the streets, one can easily see the absence of pedestrians, the early closing of shops, and the gloomy atmosphere. People no longer see the vibrancy and development that the city once had. They cannot understand what is happening in Beijing, a city that was once a symbol of China's prosperity and continuous development. Unanswered questions arise in their minds. Why has there been such a rapid decline? Can Beijing ever recover? As Apple Inc., in the United States, increases the transfer of key industrial chains to India and Vietnam, Beijing is also trying to set up obstacles to prevent the transfer of supply chains. As the Sino-U.S. trade war continues to escalate, some analysts point out that there is a risk of further deep depreciation of the RMB, which may bring a chain reaction to other Asian currencies. Recently, water, electricity, gas, and other prices have increased in many places in China, but at the same time, the prices of household appliances have fallen. What is the reason? Apple is reported to be accelerating the transfer of China's supply chain, and Chinese customs have set up obstacles. Nikkei Asia News reported on Monday, April 14, that Apple Inc. in the United States took advantage of the 90-day tariff grace period to increase the transfer of key industrial chains to India and Vietnam and expand the production capacity of overseas factories. But Beijing used strict customs inspections to try to slow down the process. A person familiar with the matter told Nikkei that Apple has helped suppliers in other countries purchase equipment to help India increase iPhone production by millions. Apple also told suppliers that most MacBooks and iPads for the U.S. market need to be produced in Vietnam. Apple hopes to produce at least 50 million iPhones in India this year, and India will produce most iPhone models sold in the United States. The U.S. technology giant began asking major suppliers to increase iPhone production in India earlier this year, but factory utilization there has reached its maximum, making it difficult to increase production capacity. According to multiple people familiar with the matter, Apple also asked suppliers to ship as many parts as possible from China to Southeast Asia and India to support the U.S. market's demand for various products. Meanwhile, Apple has instructed its suppliers to accelerate the transfer of production of components such as printed circuit boards to Thailand and other regions outside of China, according to people familiar with the matter who spoke to Nikkei. A manager at a major Apple supplier also confirmed that Apple is accelerating the diversification of its business away from China. The manager added that Apple is now seriously considering multiple component production bases in Thailand. According to multiple people familiar with the matter, shipments of production equipment from China have stagnated as the Chinese authorities have been strengthening customs inspections for several months. It's not that we don't want to expand production capacity, but the problem remains. Exporting equipment from China is an ongoing challenge, said an executive at an Apple assembly plant. Apple has not yet responded to Nikkei's request for comment. An unprecedented wave of price increases is coming in China, and it is difficult for anyone to stay out of it. Recently, the self-media Zhigu Trend Inside the Wall published an article stating that Shenzhen, the richest city in China, recently plans to increase the price of tap water by 13.05%. Before Shenzhen, many cities had already pressed the price increase button. The water fee in Guangzhou has increased by 34%, Nanjing has increased by 26%, and a ton of water in Beijing is almost 5 yuan. Gas and electricity have also increased. In 2023, at least 52 cities and counties across the mainland increased the price of residential gas, and the basic residential gas price, i.e., the first-tier gas price, increased by an average of 0.256 yuan per cubic meter. Similarly, Anhui and other places have further optimized the peak and valley time-of-use electricity prices, as well as the previous high-speed rail price increase, Guangzhou subway price increase, university tuition price increase, etc. However, those who are interested should also have observed that, on the one hand, the prices of necessities such as water, electricity, gas, etc. have increased, while on the other hand, mobile phones, cars, and cosmetics are being crazily discounted. Such a contrast, what signal does it reveal? The current economic situation is that many companies are struggling in the price war, laying off employees and cutting wages, while residents are pessimistic about the prospects, holding their wallets tightly and not daring to consume, resulting in insufficient domestic demand, and the mutual influence has fallen into a vicious cycle. According to data from the National Bureau of Statistics, the CPI fell by 0.7 percent year-on-year in February this year, and the PPI fell by 2.2 percent year-on-year, which is not optimistic. One way to break the deadlock is to let prices rise moderately. In this year's CPC government work report, the target for the increase in consumer prices was set at about 2 percent, which fully demonstrates the importance the mainland government places on moderate price increases. High-speed rail, gas, hydropower, and other rigid demand industries have taken the lead in taking action, which is actually a lever to drive the moderate recovery of prices. Tianfeng Security's calculation results show that a 4 percent, 6 percent, and 8 percent increase in the price of hydropower and gas will drive the year-on-year growth rate of the PPI up by about 0.5, 0.7, and 1.0 percentage points, respectively. This year, the government has arranged 300 billion yuan in ultra-long-term special treasury bonds to support the replacement of old consumer goods with new ones, which is double the scale of 2024. At the same time, the types of consumer goods that can be subsidized for replacement have been expanded to 12, and the coverage will be further extended to rural areas. Vigorously boosting consumption and accelerating the filling of domestic demand, especially consumption shortcomings, will help domestic demand become the main driving force and stabilizing anchor for economic growth. Moderate inflation is actually conducive to economic development. Especially in the current context of local government debt, if the appropriate CPI inflation rate can be maintained, then as time goes by, rising prices can effectively dilute debts and ease repayment pressure. Therefore, no matter from which angle, promoting a moderate recovery in prices will be a long-term policy orientation, and the reduction of reserve requirements and interest rates will continue. At the end of 2024, the balance of RMB deposits of Chinese households reached 151 trillion yuan. In the first two months of this year, people were still depositing money crazily, with RMB deposits increasing by 6.13 trillion yuan, equivalent to 10 billion yuan deposited by people across the country in banks every day. Abnormal. China's M2 increased by 7% year-on-year at the end of March, but both CPY and PPI fell. On April 13, the People's Bank of China released the Financial Statistics Report for March 2025, in which several sets of data attracted attention and concern from the outside world. First, according to this report, at the end of March this year, China's broad money M2 balance was as high as 326.06 trillion yuan, a year-on-year increase of The narrow money M1 balance was 113.49 trillion yuan, a year-on-year increase of only 1.6%. According to data released by the National Bureau of Statistics of China on April 10 this year, in March 2025, the National Consumer Price Index, CPI, fell by 0.1% year-on-year. It fell by 0.4% month-on-month. The average CPI from January to March this year fell by 0.1% compared with the same period last year. Why did this result, which contradicts common sense, appear? The blogger analyzed that China's M2 has grown rapidly in recent years. The essential reason is that the pressure on macroeconomic growth is too great. Because China's consumption accounts for a low proportion of economic growth, it mainly relies on investment and infrastructure to drive GDP, and investment inevitably increases leverage. So, where did all the extra money go? The blogger analyzed that part of the reason is that the over-issued currency was converted into savings of residents and enterprises, becoming illiquid capital in banks, and the stimulus effect on the economy was ineffective. Another reason is leverage and credit, and the over-issued money became debt. The pace is accelerating. The RMB may further depreciate deeply. Bloomberg wrote that if China significantly devalues the RMB in response to U.S. tariffs, South Korea's won and bond markets may be dragged down due to the close trade relationship and fierce competitive pressure between China and South Korea. Bloomberg calculations show that the won is more sensitive to the weakening of the RMB than other Asian emerging market currencies, such as the rupiah. Based on data from the past two decades, the RMB has fallen sharply by far less than two standard deviations of the weekly average change about 30 times since 2007. In these cases, the won fell by an average of 1.05%. As the Sino-U.S. trade war continues to escalate, some analysts point out that there is a risk of further deep depreciation of the RMB, which may bring a chain reaction to other Asian currencies. In addition, the U.S.'s practice of imposing a 145% tariff on Chinese products may also force these goods to be resold to other countries, triggering more intense competition and deflationary pressure. When China devalued the yuan in 2015, the statistical correlation between the two currencies was weak, and the won was also hit. Now that the correlation is stronger, if the yuan falls to 7.50 against the dollar, the pressure on the won may be more severe. China, Taiwan Trade Accusations After Taiwanese Rapper Exposes Beijing's Influence Tactics China and Taiwan traded accusations of cognitive warfare after a Taiwanese rapper exposed how Beijing is using Taiwanese internet celebrities to influence public opinion. Chen Piyuan, a 25-year-old Taiwanese rapper who studied in China in his formative years and became a poster boy of CCP propaganda in 2022, told a Taiwanese YouTuber known as Pa Cheung about how he was brainwashed in China, in a video published recently. The video, advertised as the first part of a documentary series titled China's United Front Exposed, has been viewed about 2.7 million times. The documentary shows Chen making phone calls to Taiwanese individuals in China, a state-controlled Chinese newspaper, and a local branch of the CCP's United Front Work Department, UFWD, purporting to pitch his ideas for propaganda videos about how Taiwan's military is authoritarian and how he can introduce other Taiwanese internet celebrities to the UFWD. According to trailers for part two of the documentary, which is scheduled to be published later this month, Chen and others traveled to China in November on the UFWD's invitation and recorded how CCP officials get Taiwanese content creators to make videos about the prosperity of mainland China. Those who don't understand or care about politics are the easiest target of the United Front, the rapper said. When you are invited there, you are gradually walking into their trap. A day after the first part of the documentary was published, Chen published another video showing that his account on Douyin, the Chinese version of TikTok, had been locked. The account had nearly 1.68 million followers at the time. Chen and Pa Qiang also issued separate statements saying they would never take their own life. Taiwan's government department that handles China affairs, the Mainland Affairs Council, or MAC, warned on December 8 that it's illegal to spread disinformation or influence in elections at the behest of foreign adversaries or carry out unauthorized collaborations with the CCP and its political and military branches. On December 11, Beijing denied having bribed Taiwanese internet celebrities and accused Taiwan's ruling Democratic Progressive Party of launching a cognitive warfare effort. In response, MAC deputy minister and spokesman Liang Wenqi said Beijing's denial is futile. Liang said the CCP has always used entertainers in both the traditional media and on the internet. It's an important part of the CCP's cognitive war on Taiwan, he said. Chen's story in China began when he was 13 and started martial arts training at the world-famous Shaolin Temple. They initially treated us well, he recalled in the documentary, but that was until he made a joke. I said once, China is Taiwan's biggest island, he said. After that, some of my senior peers would rough me up when I returned to my dorm. That lasted for more than a year. During those years, Chen watched Chinese war movies that tell the CCP's version of the Second Sino-Japanese War and the Korean War and grew a strong sense of nationalism. According to Chen, he later realized that the monks at the temple, including the abbot, were appointed by the CCP. Chen had a break from the CCP's education of patriotism when he attended high school in the United States, but it resumed in 2018 when he returned to China to study law at Huaqiao University, without realizing that the university was under the direct control of the UFWD, the CCP's arm responsible for getting everyone in and out of China in line. Only after I started, I realized I was in a concentration camp, he said. The name of the university, Huaqiao, means overseas Chinese. According to Chen, there were about 100 Taiwanese students in his year, as well as ethnic Chinese from Malaysia and Indonesia, and students from Africa. The students were required to study the thoughts of Chinese leader Xi Jinping. In history classes, they were taught about China's humiliation at the hands of foreign forces and how the Chinese people in the 1940s supposedly loved the CCP over the Kuomintang, the party that ruled China before losing to the CCP and evacuating to Taiwan. Lecturers told us that it was up to us to improve cross-strait relations. After the unification of China and Taiwan, we would become officials. That should be our ambition, he said. Huaqiao University is located in China's Fujian Province, which is across the strait from Taiwan and has a dialect and tradition similar to those on the island. Having fallen in love with the place, Chen wrote songs about how people on the two sides of the strait have the same roots. In 2022, the senior-year student came under the CCP's radar after his songs that encouraged people to follow rules during the COVID-19 pandemic went viral. Local officials and media bequeathed him the title of a patriotic Taiwanese youth. In that year, he became a poster boy of the Cross-Strait Youth Development Forum, and he saw nothing wrong with supporting the CCP's unification cause at the time. Chen's signature song, Chinese Bosses, later went viral in both China and Taiwan, but he didn't receive any royalty payments, and his stardom in China soon became notoriety following a dispute with his business partner, the son of a local official. According to Chen, the partner used Chen's fame to build up a company with him before dumping him and taking the whole team away. After Chen tried to expose what the partners did on social media, the latter retaliated by launching a video campaign to label Chen as a Taiwanese separatist. The tactic led to crazed pylons by internet trolls, he said. Chen said he initially attempted to resolve the issue through China's legal system, only to be told by the court that the defendant was nowhere to be found, despite the fact that he had been posting videos on TikTok as usual. I became deeply aware that I wasn't living in a democracy, he said. I could continue to shill for the CCP, but I don't want other Taiwanese to go through the same. Earlier this year, Chen returned to Taiwan for his mandatory military service. Some of my brothers-in-arms would say, if the CCP attacks, we can just wave the Chinese flag, everyone will be fine, he said. But, they haven't considered what we will become next. I think if the CCP takes Taiwan, we won't even be deemed worthy of being, like, Hong Kong. We will become the next Xinjiang. In a documentary, Chen called the director's assistant of the Straight Herald, a state-run newspaper based in Fujian province, telling her that he was planning to expose how authoritarian Taiwan's military was. The assistant promptly agreed to arrange interviews of Chen and friends whom he had made during his military service and to talk about finding work opportunities for them down the road. In another call, a local UFWD official offered to pay extra subsidies for ferry or plane tickets if Chen could invite influential internet celebrities. In an interview with Taiwan Set News, Pa Cheung said in the city of Xiamen alone, there are more than 1,000 influencers working with the local UFWD, including internet celebrities, coaches, and others. Yotarn Lee, a professor at National Chengchi University in Taiwan whose research focuses on political thought, democratic theory, and human rights, applauded Chen and Pa Cheung for being both clever and brave. They have proved that the CCP has lots of UFWD officials working on influencing Taiwan, down to the county level, he said. Lee said the CCP is using unrestricted warfare to target Taiwan, but on the other hand, counterattacks such as Chen and Pa Cheung's documentary, combined with tools to break through the CCP's internet firewall, could deliver a fatal blow to China. He said the documentary likely will have a deterrent effect on others who might otherwise accept the CCP's invitation.