Recession-defying City

China is sending out mixed messages about its economy in the context of the global financial crisis.

There were reports that exports were down over 25 percent in the first quarter, but now with Christmas orders coming in, factories can't get enough workers; most of them are staying in their hometowns and won't budge unless they are guaranteed work for a long period of time.

There are many articles saying that China is the number one buyer of cars in the world now, surpassing the United States with over 1 million car purchases in part thanks to subsidies.

However, if there are so many first time buyers or drivers replacing existing cars, why is oil consumption drastically down? Are these new cars that fuel efficient?

Also, domestic airlines recently boasted about millions of yuan in profits, but most of that came from subsidies from the government. Nevertheless if they are making money, why are ticket prices so low right now at 80 to 90 percent off the original price?

No one can really explain how these observations as a whole make sense.

Most people in Beijing are not consuming much, due to their low salaries thanks to the government forcing the yuan to depreciate against the US dollar to prop up exports.

However, last night I went to Ikea to pick up a few things and at 9pm on a Saturday night, the place was very busy. There weren't just people window shopping or staying indoors to keep warm. There were many loading up shopping carts and those ubiquitous giant yellow shopping bags with blue handles with all kinds of things, from bedsheets to crockery, fake bear skin rugs to stuffed animals.

If anything, Ikea is totally recession proof in Beijing.

McDonald's is too. Yesterday afternoon I spent a few hours there and there were almost non-stop waves of people coming in for coffee, burgers, fries and even ice cream in the chilly weather.

What's interesting is that the American fast-food giant has had to compete with other chains, both domestic and foreign, like KFC here, leading to McDonald's having to cut its prices on set meal combos.

Another store defying the recession crunch is Uniqlo, a Japanese clothing retailer that has more foot traffic than other trendy brands like Nike, adidas and Puma combined. Uniqlo sells basics that are of a decent quality at great prices so customers don't mind buying an extra one, or three. Every other person who comes out of the Village in Sanlitun is carrying a Uniqlo shopping bag.

So when people ask me how the financial crisis has hit Beijing, it's hard to say. While millions of fresh graduates are still looking for jobs, or stuck doing menial ones from wait staff to pedicures, there are people spending their dough.

Or are they benefiting from the 4 trillion yuan stimulus package announced last November and using money that should be earmarked for infrastructure projects and buying cars, Happy Meals and jeans instead?