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Financial crisis hits Beijing's Silk Street
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At a booth in Silk Street, a famous bazaar known for fake designer goods, a young girl with a red coat and pony tail pressed 8-0-0 on the calculator she was holding.

That was how much she wanted to sell a pair of Camel brand mountaineering boots for.

Alex Salmond, a tourist from Norway, countered her offer by punching in 6-0. The low number astonished Liu Fang, the saleswoman working in the four-square-meter stall.

"The passenger flow volume dropped drastically since November and the foreign buyers have been doing harder bargaining," Liu said.

Alex wanted to go to Silk Street because he thought he could buy items at low prices.

"You know the financial crisis. I just graduated from college and I don't want to spend money on brands," he said. "What I care about is cheap but good-quality goods. That's why I come here."

Liu wouldn't sell the boots for so little which means they remained in the booth. It's one example of how the global financial crisis is affecting the bottom line on Silk Street.

Statistics, provided by Wang Zili, general manager, show only 980,000 people visited the market in November. That's 200,000 less than the previous month. Customer flow dropped by 1.6 percent in December.

"Customers are half as before these days. I saw the crisis on TV and never expected it could affect my own business," said a middle-aged female shopping assistant at a silk shop.

"The rampant economic crunch has definitely affected our sales, but overall we balanced out in 2008 from a huge boost during the Olympics," he said.

Some 1.64 million foreigners visited the street between Aug. 1 to Sep. 19, including former U.S. president George H.W. Bush, who bought seven silk robes. From Aug. 8-14 alone, sales yielded more than 100 million yuan (about 14.6 million U.S. dollars).

The Silk Street Market moved from its previous site on Jianguomen Wai Street to an adjacent purpose built five-floor mall as administrators wanted to root out the faked goods and build it into a market full of Chinese specialties, including silk, pearls, tea, china and handicrafts before the Beijing Olympics.

Before, the Silk Street was a shabby shopping alley consisted of 410 stalls selling mostly knock-off luxury brand-name garments, silk products and tourist souvenirs.

Currently, more than 60 percent of the goods sold in the street are Chinese specialties. A total of 18 century-old Chinese silk, pharmacy and restaurants are making their business in the new compound. It even promoted a "SILKSTREET" brand in January. The brand covers silk, ties, scarf, china, carpet and pearls.

On Wang's office desk were framed pictures of the Nauru and Venezuela teams marching into the National Stadium during the Aug. 8 opening ceremony in uniforms bearing the brand of SILKSTREET.

However, the problem of fake products still exists.

"There was no fake goods in the 1980s when the street was naturally set up. The infamy came as the huge demand of fake big brand products from the Americans and Europeans, and later the Chinese locals," Wang said.

"As long as the demand exists, there are fake goods sold. Many people came to the market especially to buy the fake brands."

"We are going to change the situation as we're introducing a series of Chinese brands in. Those people coming for the fake good will find there is also some excellent Chinese stuff to buy."

Wuyutai Tea Shop, first established in 1887, is expected to open a branch in the street in January.

"I hope one day people come here for the Chinese specialties, not for the fake brands." he said.

The special Chinese charisma of the Silk Street and relatively cheap and good-quality goods will guarantee a promising prospect, he said.

The rent for the vendors will not be reduced, he added.

Although he did not buy a pair of shoes, Alex did bring something back. He bought a 100-yuan "SILKSTEEET" scarf for his girlfriend.

"It's beautiful and pretty Chinese," he said.

(Xinhua News Agency January 2, 2009)

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