Page last updated at 16:27 GMT, Wednesday, 22 October 2008 17:27 UK

The Box unloads in Shanghai

By Quentin Sommerville
BBC News, Shanghai


The BBC Box arrives in Shanghai

Trade is so important to China that it is building an artificial island in the East China Sea for its newest container terminal.

The Yangshan port is one of the biggest on the planet. It is from here that China sends goods to the world, and takes a few in itself.

Wednesday's arrival, sitting at the bottom of bay 38 on the Copenhagen Express, is the BBC Box.

Its journey has taken it more than 10,000 nautical miles, from Greenock in Scotland, via Southampton, the Suez Canal and Singapore.

Three massive gantry cranes whirr and clank overhead - the box is lifted, and firmly put on to a waiting lorry.

Its cargo of 15,120 bottles of 12-year-old Chivas Scotch heads for a bonded warehouse, and eventually the bars of Shanghai.

British store

The Box's long journey has suddenly become a lot cheaper.

M&S Shanghai
Most Chinese people will find M&S too expensive

Ships are sailing half full, because the goods inside are not in such high demand now.

Sending the Box back to Southampton will cost a third less than last year.

And the Box is not the only new arrival to Shanghai.

On Shanghai's main shopping street, Nanjing Lu, a familiar name has appeared.

Marks and Spencer has just opened its largest store in Asia, and the first in mainland China.

Middle class

Although most of the country cannot afford to shop at the store, there is no shortage of customers.

Estimates vary but there are probably up to 250 million middle-class Chinese consumers
Richard Sweet, manager, Marks and Spencer, Shanghai

Digestive biscuits are an exotic draw - at 30% off, Shanghainese shoppers have been grabbing them by the armful.

"Prices in Marks and Spencer are fine for me - considering quality," says one male shopper.

"But I am more careful with my spending these days. Our earnings just aren't as stable as they used to be when the economy had double digit growth."

With shoppers back home in Britain feeling the pinch, China and its expanding middle class are a tempting prospect.

"Estimates vary but there are probably up to 250 million middle class Chinese consumers," says Richard Sweet, the Shanghai store's manager.

"That number is predicted to grow to more than 500 million in 2025, so we believe there's a long term prospect of having an aspirational and reasonably affluent consumer base here."

Strong growth

But middle class wallets in China are a fraction of the size of those in Europe and America.

I've invested in lots of stocks and they've lost 80& of their value
Betty Wang

China's middle class might only be enough to keep China growing, said Access Asia's Paul French.

"If the economy is growing well globally then China can grow at 12%, if it boosts consumption, but if the rest of the world is not doing so well, they can still grow at 9%, which ain't bad," Mr French says.

"Whether that will save [the stores] if the market collapses on Fifth Avenue and Oxford Street is a different question."

Saving China

The Scotch is flowing and the new affluence is on display in Shanghai's Glamour Bar.

But the talk there is of money troubles, not new riches.

Betty Wang is in advertising. She says she has lost most of her life savings.

"I've invested in lots of stocks and they've lost 80% of their value," she says.

Shanghai resident Betty Wang on the financial slump

"And in terms of real estate prices, I am very worried because I've got a few properties, but prices will continue to fall for the next couple of years.

"This will affect my cash flow. I'm very worried about the economy."

So with slowing factory orders, falling house prices and a collapsing stock market, China's middle class might just be able to keep spending and save China.

But they will not be able to save the rest of the world.

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