The Chinese Economy is Crumbling

This is Grim Reading

In Hong Kong’s Tsim Sha Tsui district, the mock-classical 1881 Heritage mall used to lure queues of mainland Chinese tourists eager to shop at boutiques operated by brands such as Tiffany, Cartier and Chopard. Now it attracts neither crowds nor brands. Only three of the more than 30 units at the mall owned by billionaire Li Ka-shing’s CK Asset Holdings Ltd. are occupied, and its colonnaded courtyards are quiet.

On nearby Canton Road, a shop previously rented by Swatch Group AG’s Omega for about HK$7.5 million ($962,000) a month is leased to a bank for 80% less, according to real estate agents familiar with the deal. Over in Causeway Bay’s Russell Street, a Transformers-themed fast-food restaurant has taken the place of Burberry Plc. Its rent is 89% below the HK$8.8 million the British firm was forking out in 2019, the agents said, declining to be identified because the matter is private.

China’s collapse in high-end spending has shaken investor confidence in luxury brands across the globe as companies from LVMH to Richemont and L’Oreal report falling sales in the region. Nowhere is the scale of that decline in demand more evident than Hong Kong, which was for many years the favored destination for China’s nouveau riche to splurge on designer handbags and Swiss watches.

"Hong Kong's luxury market was once a paradise, but now it's fallen into the abyss," said Edwin Lee, founder of Bridgeway Prime Shop Fund Management Ltd., which owns a portfolio of retail properties across Hong Kong. "The days when tourists came to Hong Kong to buy luxury products without thinking are gone."

A spokesperson for CK Asset said the 1881 Heritage mall is revamping its retail mix and plans to offer more casual F&B outlets as well as brands targeting Gen Z shoppers. The owner of the Canton Road shop couldn’t be reached for comment, while the landlord of the Russell Street unit previously occupied by Burberry, Soundwill Holdings Ltd., declined to comment.

Official figures show fewer Chinese tourists are visiting the city than before the pandemic, and those who are coming spend on average only half of what they used to. The hoped-for recovery when the border between the city and the mainland reopened at the start of 2023 hasn’t materialized. In the first seven months of this year, sales of luxury goods — which includes items such as jewelry, watches and department store receipts — were 42% below 2018’s level.

Fung — long one of the most popular restaurant brands in the country — revealed it was shutting more than a dozen outlets.

This sharp shift from extravagance to frugality has undermined the outlook for global luxury brands. Like Hong Kong, these firms had bet on China for future growth.

LVMH triggered alarm among stock traders when it revealed a 14% drop in sales in the region that includes China last quarter. Burberry and Hugo Boss AG have issued profit warnings. Cie Financiere Richemont SA, which owns high-end jewelry brands Cartier and Van Cleef & Arpels, was hit by a 27% drop in Greater China sales during the last quarter, with its watchmaking division posting a 13% slump. L’Oreal SA reported a fourth straight quarter of falling sales in North Asia, which accounts for about a quarter of its revenue.

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In related news:

The Glycans Are Coming

So what’s going to happen, is just basically what we’ve seen in just about all the viruses we tried vaccinating chickens against: It eventually fails, results in more virulent variants and makes everything worse. You can just look this up for yourself, what happened to H5N1 (grew more virulent) to Marek’s disease (grew more virulent), to Newcastle’s disease (hypervirulent strains emerged) and to Infectious Bursal Disease (hypervirulent strains emerged).

The now well-known Belgian veterinarian and vaccinologist, Geert van den Bossche, would have known about this stuff. He would have seen it happen during his lifetime and realized vaccines that fails to stop a virus from spreading can eventually backfire. I’m glad he opened his mouth, it led me to look into this topic.

There are probably a bunch of other scientists his age, who would have considered the same, but failed to open their mouths. For people like me this is an esoteric discovery, but if you’re a scientist who has been involved in keeping these poor chickens alive with new vaccines as mother nature tries to end their misery, you would have known that vaccinating against viruses with vaccines that fail to stop infection generally makes everything worse after a few years.

Allow me to just quote some studies on these chicken viruses: Read More

Don’t fret. The Men Who Run the World will not allow 8 billion humans to flood the cold, dark streets to commit mass murder, rape and cannibalism. They will exterminate us before collapse strikes. Everything is going according to The Plan.