Chinatown Businesses Continue Struggling and Need Help, Asian American Federation Reports
NEW YORK – Chinatown’s economy has improved somewhat since effects of the Sept. 11, 2001 attacks worsened conditions. However, the community’s progress has not matched that of New York City as a whole, and Chinatown businesses need further support to complete and sustain a turnaround.
A research report (executive summary available at www.aafederation.org/research) released by the nonprofit Asian American Federation today draws these conclusions and recommends measures to stimulate Chinatown’s economic renewal.
Based on a survey of more than 300 businesses; interviews with community, business and economic development leaders; and analysis of government data, Revitalizing Chinatown Businesses: Challenges and Opportunities examines Chinatown’s changing business environment, obstacles to improvement, and opportunities for enduring stability and growth.
The report follows two 2002 Federation studies that revealed how destruction of the World Trade Center and its aftermath hastened downward economic trends and triggered unprecedented business and job losses in nearby Chinatown. Considering an array of internal and external factors, including recent developments, the new study provides both discouraging and encouraging findings.
“On the one hand, Chinatown’s economy is fragile, and the small businesses that anchor it face complex challenges in a changing environment,” said Cao K. O, executive director of the Federation. “On the other hand, we see the beginnings of improvement, as well as strong promise for making Chinatown a vibrant, inviting commercial hub and cultural destination.”
O added: “Chinatown business owners have a vital role to play, but they need additional support. Economic revival requires long-term, cohesive efforts by business, government and community leaders.”
The Federation report offers these major findings:
Chinatown’s economy has gained ground since Sept. 11, 2001 but has not recovered completely or shared fully in the city’s revitalization. From the second quarter of 2001 to the second quarter of 2004:
• The total number of Chinatown businesses increased 4 percent, from 6,505 to 6,737.
• Total employment in Chinatown decreased 5 percent, from 136,179 to 129,338, first falling sharply and then starting to rise.
• The average wage for Chinatown workers improved 10 percent, barely exceeding a 9 percent increase in the consumer price index for the New York metropolitan area.
Chinatown’s manufacturing, retailing and restaurant industries – traditional economic pillars – are declining, while health-care, financial and professional services sectors are expanding.
• Chinatown lost one-third of its manufacturing establishments and 42 percent, or nearly 5,000, of its manufacturing jobs from second quarter 2001 to second quarter 2004. More than half (57 percent) of Chinatown’s garment factories, or 141 of 246 plants, closed from Sept. 11, 2001 to June 2005.
• The number of Chinatown retail establishments dropped 2 percent and employment decreased 6 percent from second quarter 2001 to the same quarter of 2004.
• From 2001 to 2005, income fell for 43 percent of Chinatown restaurants surveyed, while only 10 percent of restaurants reported steady or improved income. (Remaining restaurants did not respond.)
• Meanwhile, from second quarter 2001 to second quarter 2004, Chinatown’s health-care and social assistance sector showed a 13 percent increase in establishments; the finance and insurance segment saw gains of 8 percent in establishments and 12 percent in jobs; and average wages advanced 21 percent for health care and social assistance workers, as well as 35 percent for professional, scientific and technical services employees.
Chinatown’s customer base is changing in three ways, to which most businesses have not adapted:
• The manufacturing slump has reduced daytime working-class retail and restaurant patrons.
• Chinatown’s residential population is diversifying, including more immigrants from China’s Fujian province, affluent and older Chinese immigrants returning from New York suburbs, Chinese American professionals, and non-Chinese residents.
• Chinatown businesses must compete with businesses in such faster-growing Chinese immigrant enclaves as Flushing, Queens, and Sunset Park, Brooklyn.
These additional factors are hampering Chinatown’s economic growth:
• A negative image of Chinatown, based on dirty, crowded streets and sidewalks; insufficient parking spaces; traffic congestion; and businesses’ gruffness, limited English use and cash-only sales.
• Counterproductive Chinatown business practices, including operation without business or marketing plans, purely price-based competition, and noncompliance with tax and labor laws.
• Infrastructure, zoning, land-use and real estate issues, such as inadequate commercial space, zoning restrictions, rising commercial rents, and condominium development and conversions.
Chinatown businesses could resurge by capitalizing on these assets and emerging trends in or around Chinatown:
• Chinatown’s rich cultural heritage, which businesses could showcase to distinguish offerings.
• Chinatown’s central location in the metropolitan area could ideally attracting customers from outside the community for culturally tailored professional and financial services.
• Chinatown’s location in Lower Manhattan – a center of redevelopment, with a large, well-paid work force in surrounding neighborhoods and a growing, prosperous residential population.
• The expanding presence of China-based businesses in Manhattan, creating a new potential market.
The report proposes six major solutions:
•Chinatown business strategies must change to serve a diverse customer base better.
•Chinatown businesses need to improve their practices to draw more business.
•Chinatown businesses need targeted assistance, possibly incorporating funding access, advice, education, and strengthening of business and trade associations.
•To sustain environmental and business improvements, the Chinatown Partnership Local Development Corporation (CPLDC) must be maintained beyond its initial funding and other ongoing-support mechanisms should be considered.
•Government and business leaders need to resolve parking and transportation issues, with such steps as establishing an additional municipal parking garage and implementing proposals for street enhancements.
•The public and private sectors should pursue transformational development projects, possibly including a Pacific Rim office center, a cultural and performing arts center, a central food market, and one or more high-quality restaurants.
Revitalizing Chinatown Businesses: Challenges and Opportunities received lead funding from The Carnegie Corporation of New York, as well as support from the JPMorgan Chase Foundation, C.J. Huang Foundation, Cathay Bank Foundation and AT&T. The report reflects key input from business and policy advisory committees and The Ralph and Goldy Lewis Center for Regional Policy Studies of the University of California at Los Angeles.
The Asian American Federation (www.aafederation.org) is a New York City-based nonprofit organization that works to advance the civic voice and well-being of Asian Americans by collaboratively fostering community philanthropy, undertaking research to inform policies, and supporting community service organizations.
CONTACT: Howard Shih