DeepSeek and Alibaba rescue China’s office landlords

Subscribe to enjoy similar stories.A COURT IN Hangzhou, AI capital of China, ruled in late April that companies cannot fire their staff and replace them with artificial intelligence. This may come as a relief to plenty of people in a metropolis that is home to Alibaba, one of Chinese tech’s mightiest titans, with a total payroll of 128,000 employees. It is also good for Hangzhou’s commercial landlords, who have little use for AI agents and are desperate for human desk jockeys.China’s dazzling skylines are worryingly lifeless.

Since a property bubble burst in 2021, sales, prices and investment in residential and commercial real estate have tumbled. Housing has attracted most of the attention during the crisis; some 90m flats are thought to sit empty across the country. But a decade-long office-building boom has also left cities and ghost business parks littered with unfinished or unoccupied towers.In some inland cities more than 40% of grade-A offices are empty.

The central Chinese city of Wuhan, for instance, may have nearly 200-football-pitches’-worth of idle prime office properties. Commercial projects in which developers invested before the covid-19 pandemic are still coming to the market, further pushing up supply and pulling down rents.Hangzhou has seen the worst of it. The government’s crackdown on tech that started around the same time as the property-market downturn led to sweeping lay-offs at companies such as Alibaba (whose founder, Jack Ma, was a particular target of the state’s ire).