Mobike bicycles in Shenzhen, China, August 2017.

Tucked away in the corner of a busy shopping mall in Wangjing, a district in northeast Beijing, black-and-orange compartments entice passersby with a colorful pitch. “Only 1 yuan for 12 hours!” reads one bright poster. The metal boxes, which look much like vending machines, contain umbrellas; to unlock an umbrella, customers scan a QR code with their smartphone and pay an hourly rate plus a small deposit through Alipay or WeChat Pay—two popular Chinese mobile payment apps. These “brollies” are only one recent addition to China’s red-hot sharing economy, which was worth $520 billion in 2016—a 103 percent year-on-year increase. But despite the charm and utility of shareable umbrellas, bicycles, and even basketballs, there are many warning signs that China’s sharing economy has reached peak growth and that the coming months will see a wave of bankruptcies and consolidations as many start-ups built on unsustainable models fold.

China’s sharing economy

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