BEIJING – The Chinese government is encouraging businesses and local districts to develop the so-called "night economy" in an effort to boost growth.
Some retailers and hospitals have extended their operating hours, while cities are also spending on elaborate light shows. It's all part of the government's attempt to get people to spend more money at night.
China's powerful State Council formally launched its efforts to boost the night economy in late August. Out of 20 ways to increase consumption, the 12th item was titled: "Lively night-time businesses and markets."
The national-level announcement followed scattered policy releases in the last few months from major cities, such as Beijing and Shanghai, calling for the development of the night-time economy.
The moves also come as the rate of growth for the world's second-largest economy is slowing. More data released this week added to concerns of a gloomy economic outlook. In particular, retail sales grew at a disappointing 7.5% in August — analysts polled by Reuters were expecting a rebound to 7.9%.
Shopping malls add interactive events
Shopping malls are among some ways that businesses are adapting to the promotion of night-time economy, and it's not just by extending operating hours.
"The trend for new malls is to have (a food and beverage) area with access to outdoor space on the ground floors," Ellen Wei, head of retail for JLL China, said in an email. She said malls are also adding live bands, beer-brewing restaurants, escape rooms, theaters and e-sports halls. The peak hours of engagement/consumption for many of these activities are in the evenings or late at night, Wei said.
"The night-time economy has increased foot traffic for these commercial properties," Wei said, noting that major consumption occurs between 6 p.m. and 12 midnight and "retailers are happy that the government is backing the night economy."
Retailers are happy that the government is backing the night economy.Ellen Weihead of retail for JLL China
The effects of the policy moves have already been felt in Beijing.
In May, Hopson One, one of the capital city's most popular shopping malls, announced the official opening of its "late-night canteen." The mall said it wanted to "increase the consumption options for the city's consumers, push forward the rapid development of the city's night-time economy" and "respond to the government by sparking action in Beijing," according to a CNBC translation of a Chinese-language online post.
The mall already has a nearly 20,000 square-meter underground food and beverage area that's built to look like the narrow, stone-paved streets of an old town. Under the "late night" banner, Hopson said it would add a slew of events, including street dance, music DJs and interactive activities. The indoor area is now open as late as midnight, while the rest of the mall shuts down at the usual closing time around 10 p.m. or earlier.
The interest in late-night eating has also spread to online food delivery.
One of the major companies in the industry, Meituan Dianping, disclosed that for the first six months of the year, orders placed in Shanghai between 9 p.m. and 5 a.m. grew 127% from the same period a year ago. The two hours from 9 p.m. to 11 p.m. accounted for nearly two-thirds of the orders, it said.
Meituan said other cities, such as Hangzhou and Shaoxing, saw more than 40% growth in night-time orders during the first half of the year.
From hospitals to tourist hot spots
Retailers are not the only ones extending operating hours; even health care providers are.
One hospital in the eastern suburb of Beijing announced in August that it would open a night-time clinic on weekdays from 4:50 p.m. to 8:30 p.m., according to state-run media.
(The) night economy is a very important reflection of the vitality of the economy.Qin Gangdeputy secretary general, China and Globalization
In recent years, some hospitals have been experimenting with night-time clinics, or extending their operating hours, according to an opinion piece carried in August by the Shaanxi Province branch of People's Daily, the Communist Party newspaper.
"With the (growing) abundance of popular night life, 'night economy' in many large cities is in full swing, 'night-time health care' should not fall behind," the Chinese-language article said, according to CNBC's translation.
Tourism is another area authorities are trying to tap. In particular, some cities are spending millions of yuan to develop light shows or other light-related attractions for tourists.
"Under the support of night-time economy and smart cities, local landscape lighting plans are being released, and many localities plan to spend more than 100 million yuan (about $14 million). In urban beautification, pulling up night-time consumption, also gives uses of LED a new space for growth," China-based LED research group Gaogong said in June, according to a CNBC translation of the Chinese-language article.
Other Chinese cities spending on light shows in recent years include Qingdao, Yantai and Hangzhou. In Beijing, the Forbidden City held a light show in February that was part of its first night-time opening since it became a museum nearly a century ago.
Challenges ahead
China is still a long way from being able to foster the kind of vibrant nightlife seen in major cities such as New York or London.
In some major cities around the world, the "night economy is a very important reflection of the vitality of the economy," said Qin Gang, deputy secretary general at think tank Center for China and Globalization, according to a CNBC translation of his Mandarin-language remarks.
He pointed out that night-time spending is primarily driven by Broadway shows and other cultural activities in those places. But there aren't enough such activities in Beijing, and that creates opportunities to develop the culture, entertainment and arts scene in the Chinese capital, he added.
Street food vendors (have) always been part of a lively night life. ... There is a certain kind of conviviality. There's a certain enjoyment of life.Kolleen GuyDuke Kunshan University
The opening of indoor or organized "late-night canteens" also contrasts with the relative absence of open-air night markets in Beijing.
In the last few years, the capital city has cracked down on old neighborhoods that once held many street food vendors and closed areas it considered unsanitary.
"Street food vendors (have) always been part of a lively night life. ... There is a certain kind of conviviality. There's a certain enjoyment of life," said Kolleen Guy, associate professor of history and division chair of the social sciences undergraduate program at Duke Kunshan University located near Shanghai.
At the same time, street food creates an environment for people to mingle at night in ways they might not otherwise, she said. "For a lot of regimes that's sort of a scary spot because it isn't controlled and people can talk. ... By pushing them indoors you maximize the control. You control who goes in and comes out."
Another challenge is that shopping centers that want to take advantage of the government's support for night-time economy must step up their initial investment without guarantee of returns.
"Retailers have to bear the extra costs generating for the extended operating hours, which does not necessarily bring in the same ratio of income, compared to normal operating hours, because the night traffic is more dispersed," JLL's Wei pointed out.
Finally, limited public transportation creates a challenge for the night economy's development. Like many Asian cities, Beijing's subway system closes by midnight.
"I suggest Beijing should, like New York, open one or a few 24-hour subway lines," Qin said. "(New York is) a 24-hour city, it is a 'sleepless city' — so I think Beijing should also be like that."