In recent times, Shanghai has experienced a significant exodus, with one-third of its population fleeing the city. The once vibrant metropolis now faces a stark transformation as foreigners leave, and empty houses line up for sale. Business activities have stagnated, and people are tightening their spending, leading to dire straits for the real economy.
The streets of Shanghai have become eerily quiet, resembling a ghost town. The desolate streets of Shanghai evoke an almost otherworldly atmosphere, as if the city has been transported to a different realm. Residents have noted that many people departed earlier this year to return to their hometowns. By 7:30 p.m., the streets appear completely abandoned. Near the subway station, which usually bustles with commuters, there isn’t a single person to be seen. Shanghai has certainly undergone a significant transformation.
Foreigners are no longer as prevalent in Shanghai as they once were. Many have also left, and the streets are no longer the same. While there used to be foreigners everywhere, now you only see a few in the city centre. In the suburbs, they are almost nonexistent. Shopkeepers and restaurant owners in Shanghai have corroborated this grim reality, observing that brick-and-mortar establishments are facing unprecedented challenges. Additionally, a significant number of professionals from the post-1980s generation employed in corporate roles have experienced mass layoffs.
So, just how bad is the situation in Shanghai? Nearly 5 million non-locals have left the city. Previously, Shanghai had a permanent population of 26 million, but it has now dropped to around 20 million. In November 2024 alone, Shanghai’s retail sales growth rate plummeted by 24.4 percentage points, falling to minus 13.5%. Economists noted that since 2024, China’s overall consumer spending, as reflected in total retail sales, has remained weak. First-tier cities like Beijing and Shanghai have seen even weaker retail growth, with multiple months of year-over-year declines. Shanghai and Beijing have recorded nine and seven consecutive months of negative retail growth, respectively. In November 2024 alone, year-over-year declines in these two cities exceeded 10%.
A market analyst pointed out that one key reason for the sharp decline in Shanghai’s retail growth is the withdrawal of foreign enterprises from China in recent years. The departure of high-income professionals who once lived in these cities has directly weakened consumer spending. Economists at Namura China, further analyzed that under normal circumstances, young people have stronger spending power than the elderly. However, as economic downturns shrink job opportunities in major cities, population shifts are occurring. Young people are leaving cities like Beijing, Shanghai, and Guangzhou in search of better opportunities elsewhere.
The economic downturn has also severely impacted high-end dining and luxury consumption, further weakening the consumer market in Beijing and Shanghai. With companies shutting down and job opportunities drying up, many non-local residents, especially younger workers who can no longer afford Shanghai’s high cost of living, are leaving in droves. Given the Chinese Communist Party’s strict control over data, it is difficult to discern the true extent of the situation. If the outflow of non-local residents continues, who will buy homes in Shanghai? Housing prices in the city may continue to plummet.
Beyond the migration from big cities to smaller towns, China’s overall population outflow is also intensifying. More and more of China’s wealthy elites are emigrating. One man remarked, “This data is terrifying. Just in February last year, 380,000 people in Shanghai were in the process of immigrating, taking at least 48 billion yuan (approximately 6.57 billion USD) in assets with them. Every year, no fewer than 15,000 millionaires leave China. These individuals make their money in China and then immediately leave. They don’t just transfer billions abroad; they also take vast amounts of technological expertise with them.”
This data comes from a report by AfrAsia Bank and is likely a conservative estimate—the real figures could be even higher. Moreover, Chinese millionaire immigration accounts for 15% of the world’s total wealthy immigrants. Even more alarming, 60% of China’s top 100 richest individuals have shown intentions to leave. Looking at the Hurun China Rich List, many of these ultra-wealthy individuals may still hold Chinese citizenship, but in reality, their hearts, their money, and even their physical presence are already outside of China.
The loss of population is also making Shanghai’s once highly coveted education system and household registration (hukou) far less desirable. Many people have remarked that they have heard numerous kindergartens and primary schools in Shanghai are shutting down due to the low birth rate. With too few newborns, Shanghai is attempting to attract people and migrant workers. The city’s so-called floating population no longer have to leave their children behind in their hometowns. Instead, they can now enroll their children in Shanghai’s public schools, allowing them to complete their education all the way up to the national college entrance exam.