A wave of international retailers have announced major store closures across China, including the likes of Ikea, Zara, Zara Home and Lane Crawford. As many big international brands are moving their China business online, shopping centre vacancies are on the rise, and rent prices are falling. The same is happening with office space across China’s top-tier cities.

Much of the focus of China’s property market woes has been on private apartments. Yet, both retail and office space are also facing serious problems. The rapid expansion of office space development across China appears to be finally hitting a limit. Meanwhile, a similar thing is playing out in shopping malls.  This is in part a result of Beijing’s push towards online retail, but also a result of overall weak consumption. 

It’s getting tougher and tougher for foreign brands operating in China. Shopping malls, while adapting to the changes by focusing more on restaurants, education centres and nail salons, are likely to continue to decline. Office space faces an even bigger challenge, as those international companies which have typically required the most space are cutting back. In the coming months, there are likely to be more headlines relating not only to private property developers, but also to those who build and operate office and retail spaces.

Nvidia is requiring full upfront payment from Chinese customers seeking its H200 chips, reports Reuters. This is reportedly in response to ongoing uncertainty over Beijing’s approval of the shipments, said two people briefed on the matter.

The US chipmaker has imposed unusually stringent terms requiring full payment for orders with no options to cancel, ask for refunds or change configurations after placement, the people said.

Nvidia’s standard terms for Chinese clients have previously included advance payment requirements, but they were sometimes allowed to place a deposit rather than make a full payment upfront, the person said. But for the H200, the company has been particularly strict in enforcing conditions given the lack of clarity on whether Chinese regulators would greenlight the shipments, the person added.

The year began with a bang on the other side of the world—that is the US invasion of Venezuela and the kidnapping of its president who is now to be tried in New York on drug trafficking charges. And while this has nothing apparently directly to do with China, in fact there are several elements which are very pertinent to our area of interest. A high-level Chinese delegation met with the Venezuelan president just before the US operation took place, and Beijing has been consistently supportive of Venezuela in recent years, creating a significant relationship involving loans in return for oil. Beijing in recent years has been working hard to create relationships right across the Global South and Latin America has seen a huge increase in contacts and involvement with China.

So, what’s the shape of the future? The comments from Trump and his people suggest they’ve been reading the famous George Orwell novel 1984, from an unexpected perspective. In that book, the world is divided into three empires that are perpetually at war with two ganging up against the third, with the combination constantly changing. It certainly feels in so many of their moves as if the Trumpists are aiming at a world where the United States controls the Americas with no outside influence or interference, while Russia is allowed to dominate Europe and China to dominate Asia. We repeat that it only appears that way, because of course we have no way of knowing what they are really thinking and planning.

The Venezuela move impacts on the situation in East Asia in one way—it provides an example of accepted norms of international relations being cast aside. There were those who immediately made the leap from this to the island, and just a couple of days ago, asked about the implications for Taiwan, Trump said an interview with the New York Times that he would be “very unhappy” if China changed the status quo and expressed confidence that China would refrain from doing anything while he remains president.

There is quite a lot of speculation that Trump will visit Beijing this year, with April often being mentioned as a possible rendezvous date. One presumes the island will be on the agenda and one wonders if the master dealmaker will be going into that discussion with the intention of doing a deal. One way or another, given the situation in the United States, it could well be that the period between now and the midterm elections in November has a special significance. But there are many moving parts in this game and nothing is certain until it becomes certain.

It would be nice if 2026 could be a year of peace and conciliation, but it looks unlikely.

Have a pleasant weekend in spite of it all.

Ikea will close seven of its 41 stores in mainland China, reports the South China Morning Post. This comes as the furniture retailer grapples with the country’s weak property market and low consumer spending, which have dampened demand for its goods.

Following a comprehensive review, Ikea China said the seven stores would cease operations from February 2. These are located in Shanghai, Guangzhou, Tianjin, Harbin, Ningbo, Xuzhou and Nantong. One new small-format store is expected to open in Dongguan, in February, while another will launch in April in Beijing.

“Ikea’s decision to close some of its standard-sized stores and open small-format outlets indicates a shift away from large-scale expansion,” said Fan Xinyu, assistant professor of economics at Cheung Kong Graduate School of Business in Beijing. “Instead, it will focus on catering to the precise demand of targeted customer groups.”

Beijing has asked some Chinese tech companies to halt orders for Nvidia’s H200 chips this week, reports Reuters, citing people familiar with the matter. The leadership is expected to mandate domestic artificial intelligence chip purchases.

China’s directive to suspend orders was issued as the government considers whether, and under what conditions, to allow access to Nvidia’s high-performance chips.

Beijing is aiming to discourage local technology companies from rushing to stockpile US chips before a decision is reached, the source said.