Spanish local merchants losing in competition with Chinese Shop-owners


Gigantes y cabezudos Alcalá de Henares

Consequence of globalisation and big-time ‘prostitution’ for market share?

Locals and tourists alike enjoy taking a stroll in the picturesque oldtown of Alcalá de Henares, rich with history and the goal for many tourist looking for the birthplace of Cervantes, the Magistral Cathedral and many other sights, walking up and down the charming Main Street before sitting down for a beer or a nice bite of torreznos.

Until a few years ago, the shops and services in this street were quite traditional and Spanish. Now, things have changed.

A remarkable high share of the shops are owned by Chinese families, selling all kinds of low priced items, “todo a cién” (“Everything at 1€”), products for the kitchen, tools, clothes, candies, snacks… In fact the whole fachade and style of the Main Street is changing. And I would say that the change is downwards and deteriorating image and attractiveness for tourists and locals alike.

Nowadays its seems like chinese are the only ones capable of paying for the rent in the attractive locations, and in fact they mostly and reportedly tend to pay in cash. Local merchants are not able to compete with these newcomers. Why?

Spain, as many other western countries, is very eager to enter China. So there is a lot of wheeling and dealing at the highest political levels in order to facilitate Spanish investments and inways into China. For the bigger Spanish companies with international reach, basically.

One of the terms that have been accepted, already back in 1992, in exchange for Spanish joint-ventures etc, is that chinese that set up business in Spain will enjoy a tax holiday for several years (5-7). And with some good planning of continuity and changeover rules, this tax-holiday may be extended for an even longer time.

For Spanish-speaking readers:
Some say claim tax-holidays: http://bit.ly/173Qxy and http://bit.ly/aNB1zU
Others say it does not: As seen on Aeat web and as expressed by this chinese person http://bit.ly/9SF6u9 .
Formally there doesn’t seem to be any tax holidays. Now since the agreement between China and Spain is there to avoid double impossitions, maybe there are loopholes.

Tax holiday loopholes and apparant preference in the municipal burocracy of licences and permissions… This combined with the chinese hard-working life-style, involving the whole family, different interpretations of labour regulations, as well as lax control from authorities unable to do their job with those exploiting (or not) the language barriers… These are circumstance the Spanish small-business owners, who also face comeptiton from the bigger shopping centers, are not able to handle. Many go out of business. And as a consequence, inner-city life is changing a lot. A lot.

I ask myself this question: National small businesses and local environment change seemingly only for the potential benefit of bigger political and economic interests. Is this one of the results of globalisation?

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