There’s nothing China can’t make in abundance and often in excess — even shopping malls.

Across the United States, one in six shopping malls has closed since the sector peaked in 2013. But China has been on a frenetic construction boom, with its number of malls doubling since 2013 to 6,700.

Many retailers in China are now feeling the consequences of that overbuilding. While some Chinese malls are thriving, others are withering from lack of customer traffic.

Apple this month closed its store in the InTime City mall in Dalian, a port city in northeastern China. It was a first for Apple in the country, where the tech giant operates dozens of retail locations. Apple’s second store in Dalian, at the Olympia 66 mall just 1.6 miles away, has remained open and even taken on employees from the defunct store.

All over the world, shopping malls are wilting under fierce competition from e-commerce. The competition is especially fierce in China, where home delivery is particularly cheap and convenient. An estimated 10 million people work in delivery, many on electric scooters, but some are starting to use self-driving trucks and even drones.

The real problem in China’s shopping mall sector, as it is in much of China’s real estate sector, is years of frenetic, debt-fueled construction. Developers have continued a building blitz despite a sharp slowdown in retail sales that started during the Covid-19 pandemic and has continued since.

One reason for the continued construction of malls is China’s tax system. Local governments, which have enormous influence over what gets built in their jurisdictions, derive considerable sales taxes from malls. Apartment buildings, on the other hand, pay almost no annual real estate taxes. So local officials often require that new malls be included in big real estate projects, and the construction isn’t stopping.