Dawn of the night economy

Growth-minded Chinese cities harness the power of post-dusk business activities

In pursuit of economic growth, Chinese cities are increasingly liberalizing rules to allow life-enabling, consumption-boosting business activities at night, experts said.

For consumers such as Zhang Honglei, 25, a reporter based in Beijing, this trend signifies a game-changer.

On the New Year's Eve, she invited several friends over for a late-evening fun and frolic. They had barbecue at Sanlitun, Beijing's lifestyle and commercial hot spot, around 6 pm.

Next, they headed to a cafe-bar for some cocktails, and stayed awake till 5 am. Then they left the bar and used a popular ride-sharing app to book a taxi to Tian'anmen Square to see the flag-hoisting ceremony at dawn.

According to Zhang, the dusk-to-dawn fun stoked consumption, entailed expenses of around 250 yuan ($37.3) per person.

She is not the only one of her kind. Yang Gang of Beijing also has a comparable lifestyle. Yang told People's Daily Overseas Edition: "What's fun about living in cities is that you've always got something to do at night. In less-developed cities, all you can do is stay at home and watch TV."

Urban lifestyles are changing as a result of city-level governments' new-found liberal outlook on late-evening business activities.

For instance, at a conference in January, Beijing municipality officials said the city government would announce more policies to promote the "night economy".

It is a phrase that refers to commercial activities conducted over a 12-hour period from 6 pm to 6 am. Typically, the services sector - shopping malls, entertainment facilities like cinemas, music and drama theaters, tourism attractions, lifestyle destinations like bars, karaoke centers, barbecue restaurants, 24/7 convenience stores and supermarkets - plays a major role in the night economy.

Beijing's plan is to encourage shopping malls, supermarkets and convenience stores to extend their business hours.

By 2022, 24/7 convenience stores in Beijing will likely dominate the neighborhood retail sector. Each district will have at least one night commercial area, said Yan Ligang, director-general of the Beijing Municipal Commerce Bureau.

In the national capital, the peak business hours at Wangfujing Street, a major commercial center, are always after dusk.

Now, other Chinese cities are jumping on the night economy bandwagon.

According to Nie Xinwei, assistant researcher at the State Information Center, about 62 percent of the daily retail sales in Shanghai are brought by the night economy.

Night consumption contributes 55 percent to the output value of the services sector in Guangzhou, capital of the southern Guangdong province.

According to a document released by the Tianjin municipal government in November, the city plans to build six night commercial blocks, including Italian-style streets, food streets, squares, and parks for entertainment activities.

It will also organize a light show alongside the Haihe River, Chinese folk arts performances, night carnivals featuring snacks, beer and seafood, as well as encouraging restaurants and shopping malls to extend their business hours.

The commerce authority of Tianjin said the development of the local night economy is aimed at optimizing the municipality's industrial structure, stimulate consumption, attract visitors, improve city's openness and vitality, all to promote high-quality development.

Xi'an, capital of Shaanxi province, announced a plan in April 2018 to promote night tours of the city.

This Spring Festival Eve on Feb 4, about 350,000 tourists enjoyed Xi'an's lantern show, snacks and street performances near its iconic attractions such as Big Wild Goose Pagoda.

The light show is expected to net over 50 billion yuan in retail sales of consumer goods in Xi'an by 2020, according to local government data.

Li Daxiao, chief economist at Shenzhen-based Yingda Securities, said: "The night economy has great business potential waiting to be exploited. Most of the consumers have to work at daytime and have time for consumption only at night."

Prosperity of a city is closely linked to its night life, he said.

Wang Zhe, an economics lecturer at Macquarie University, said developing night-time commercial activities could help promote retail and services, especially when e-commerce is grabbing offline consumers.

"A local government's investment in optimizing or beautifying its city helps promote its economic development," he said, adding it can also provide more job opportunities.

Han Zhenglong, a lecturer from the Business School of Ningbo University, told People's Daily Overseas Edition that when the economic development model shifts focus from foreign trade to domestic consumption, efforts should be made to stimulate local demand.

The ongoing consumption upgrade will aid the development of the night economy, Han said.

Li from Yingda Securities said challenges still remain in the form of lack of adequate top-class infrastructure, fool-proof public security, access to traffic tools and guarantee of quality of products or services.

Additional costs of human resources, power, water and other equipment relating to extended business hours could also discourage some commercial establishments from joining the night economy, industry insiders said.

Li Zhiqi, vice-chairman of the Beijing Federation of Industry and Commerce, said at the second session of the 13th Beijing Municipal Committee of the Chinese People's Political Consultative Conference in January that cities should develop more emerging fields such as sports, fitness, cosmetology, education, cafes and bookstores, to meet the demands of the young generation, who are the major consumers of night-time activities.

He also suggested local governments should help reduce operational costs of companies, by way of subsidized rentals, logistics, power and water expenses relating to the night economy.