02.08.09
China’s Economic Recession Underway
McDonald’s price cut for 4 of its set meals made international news last week in the New York Times and elsewhere. Layoffs are underway, and not just in Dongguan and Shenzhen. Intel is closing its Shanghai plant, laying of 2,000 workers.
Less than a year ago, one of the economic concerns to me in Shanghai was rapid appreciation of the RMB and inflation. Now it seems unlikely that the RMB will gain anything – if it doesn’t actually give up some gains its made since 2005 – and deflation may be on its way? The Coffee Bean chain in Shanghai is peddling its mugs with a promotion of getting a free “cuppa” with the purchase, and the bilingual encouragement of “Don’t let the economy get you down! 不要让经济风暴打垮你”, and bars like the Mexican Adobo offering a daily Economic Recession Happy Hour, with beers for 5 yuan and hard liquor for 7.
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