Chinese businesses, like this one in Avenida Velázquez in Malaga city,are starting to close down.
The economic crisis is now having an effect on the Chinese businesses in Malaga province. Just two years ago, these ‘bazaars’ , clothing shops and restaurants were flourishing and new ones seemed to open almost every week, as the Chinese entrepreneurs took advantage of the closure of local businesses to take over the best premises in the busiest streets. Now, however, some of them are also being forced to close down because of lack of business and financial difficulties.
A walk through areas of Malaga city such as Calle Ayala, Avenida de Velázquez and Avenida de Europa reveals that even in this ‘China Town’ area of the city, ‘To Let’ signs are beginning to proliferate.
In Avenida de los Guindos, a huge Chinese ‘bazaar’ which occupied premises that are more than 1,000 square metres in size closed down two months ago after having been open for three years. The estate agency that is handling the property says the business owners had given up half of the premises a few months ago, but had to close because they still couldn’t afford the rent. They were paying 8,000 euros a month. A similar shop is still open nearby.
In Avenida de Velázquez there is yet another business closed down, the Xin He clothes shop. According to a worker in a similar shop nearby sales are rarely made these days. “It’s very difficult to sell anything here and there are a lot of offers on everywhere. It’s understandable that there isn’t enough business for all of us”, she says while keeping her eye on a shopper who is browsing through the coats on display.
In the Avenida de Europa, there is another shop with a ‘To Let’ sign. In Calle Ayala a Chinese advice centre has closed and another establishment, the Super Bazar Wang Sheng Du, has its metal shutters pulled firmly down.
Yuebiao Liu, the president of the ‘Asociación de Comercio Chino Andaluz’ (the Andalusian association of Chinese commerce) agrees that these are the first notable closures among his members and points to three factors to explain why this is happening now.
Firstly the general fall in sales is also affecting ‘bazaar’ style shops in spite of their low prices. Secondly there is a huge amount of competition between businesses. As Liu says, “over a very short period many similar businesses opened very close to one another”.
The third factor is the sanctions, including temporary closure, imposed by the authorities on those selling alcohol to minors. Though no exact figures exist, the police have confirmed that the majority of the businesses sanctioned for this reason in 2012 were run by Chinese citizens.
According to Enrique Gil, president of the ‘Federación de Comercio de Málaga’ (FECOMA or Malaga’s business federation) the reason for the closure of Chinese enterprises is no more than a reflection of the self-regulation of the market. “The proliferation of businesses run by the Chinese was seen as a good thing but now it looks like a mistake because these busineses are not lasting. Competition is good, whatever nationality it comes from, but it must be properly regulated”.
There are currently 8000 businesses run by the Chinese in Malaga whose population in the province numbers 5,421 people. 70 per cent of these are restaurants, food shops and ‘bazaars’ while 30 per cent are wholesale companies.