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China’s Solution to COVID-19’s Economic Impacts: the “Stall Economy”

Jul. 3, 2020

Recently,”地摊经济(dìtān jīngjì) stall economy” is a greatly talked-about economic phenomenon in China today. This topic is everywhere on some social platforms in China,. What does it mean?

The topic came up because we were discussing the pandemic this year, and the fact that the economy was extremely sluggish – some might even say “stalled” – meaning that many small and medium-sized enterprises could not withstand the sudden loss of business and chose to shut down.

地摊经济 (dìtān jīngjì): stall economy

地摊 (dìtān): stall, booth

经济 (jīngjì): economy

Example:

dìtān jīngjì yǒuzhe dútè de yōushì
地摊经济有着独特的优势。
The stall economy has unique advantages.

On the morning of June 1st, Premier Li Keqiang of the State Council said during an inspection in Yantai, Shandong Province that the “地摊经济 (dìtān jīngjì) stall economy” and small-shop economy are important sources of jobs, catalysts for growth, and a source of vitality for China.

Before, the relationship between the “城管(chéngguǎn) urban management” and the “商贩 (shāngfàn) vendors” was that of a cat and a mouse: vendors were not technically allowed to set up street stalls, so as soon as they saw the urban management they had to pack up and leave. Between a lack of consistency in city management standards, vendor ignorance about specific rules, and customer’s lax attitude towards the informal businesses, the environment was chaotic and the streets were messy — banning street vendors was the simplest solution.

城管(chéngguǎn): urban management. Refers to the people who manage the image of the city.

Example:

liúdòng shāngfàn dōu hěn pà chéngguǎn
流动商贩都很怕城管.
Mobile vendors are very afraid of urban management.

商贩 (shāngfàn): vendor

Example:

tā de fùqīn shì shuǐguǒ shāngfàn
他的父亲是水果商贩。
His father is a fruit vendor.

Some university professors pointed out that opening up a “地摊经济(dìtān jīngjì) stall economy” could create at least 50 million jobs and ease people’s economic burdens.

The“地摊经济(dìtān jīngjì) stall economy” refers to an economic system that revolves around the transactions (i.e. incomes) of street vendors. The stall economy” is generally a fringe economy in any city, and has always been a key factor influencing the city’s aesthetic and environment. However, the stall economy has unique advantages that can relieve employment pressure – to a certain extent – in the context of a financial crisis.

In a “地摊经济(dìtān jīngjì) stall economy,” the barrier to entry is low – there is little or no pressure of overhead costs like shop rent, and there are no education or skill requirements. Many people can sell goods by opening a stall, or even selling directly out of the trunk of their car. In addition, the risk of failure is relatively low, and the prices of goods are low, providing buyers with more choices and benefits.

But is the resurgence of the “地摊经济(dìtān jīngjì) stall economy” a temporary measure or a sustainable employment option?

Once the economic crisis caused by the pandemic has passed, will there be any changes to the policy? Will the conflict between urban management and stall vendors reoccur? A change in policy risks bringing with it the loss of property for urban residents as well as trust in the government.

“管理(guǎnlǐ) management” is also a key topic. If the urban visual landscape that has been formed through long-term urban governance and image management is again flooded with street stalls, it might cause more chaos and disorder in cities. Informal economic practices also carry the risk of deception, fraud and other illegal activities, which would jeopardize and even undermine the original intent behind encouraging the stall economy.

管理 (guǎnlǐ): n. management / v. manage

Examples:

xuéhuì guǎnlǐ shì yī xiàng hěn zhòngyào de jìnéng
学会管理是一项很重要的技能。
Learning to manage is an important skill.

zhè jiā gōngsī cúnzài guǎnlǐ wèntí
这家公司存在管理问题。
This company has management problems.

In addition, to a certain extent the “地摊经济(dìtān jīngjì) stall economy” also has an impact on public infrastructure and the environment. The competition between “商贩 (shāngfàn)  vendors” for setting up their stall sites, as well as between the vendors and surrounding shops, have led to confrontations, some of which have even turned violent.

Anyway, it’s both an opportunity and a challenge. I believe that many Chinese people are eager to try new things both at home and abroad, and at the same time many people around the world have started evaluating the commercial opportunities in China. Many see language as a huge barrier to entry, but I can tell you that it’s less of a barrier than you might think!

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