Chinatown’s economy has been very dynamic within the past years. The majority of businesses located in Chinatown are directed towards the tourism industry. These businesses include restaurants, jewelry stories, grocers, and small gift shops. As well, Chinatown is well-known for its street vendors, many of which sell “knock-off goods” to unsuspecting tourists. Events such as the September 11 attacks and Hurricane Sandy have affected business in Chinatown dramatically. As a result, numerous coalitions and partnerships have been created to combat the economic decline and revive Chinatown’s economy. The Asian American Federation and the Chinatown Partnership are just two examples of these movements to support Chinatown’s economy.
Gentrification has caused an increase in the price of living in Chinatown and because of this, the pressure on local small businesses has increased. These small businesses include local cafes and restaurants that survive through their neighborhood clients. In a survey done by CAAAV Organizing Asian Communities (CAAAV), it found that small businesses in Chinatown reported that 93% of their customer clientele were residents of Chinat
own. As pictured in the graph on the right, though the tourist population has become a good customer base for these small businesses, it does not make up the majority of the businesses’ profits. Because gentrification has been pushing their customers out and bringing in more affluent populations, a large number of these small businesses struggle to find their usual customer base and now have to adapt their services to meet the needs of their new customers.
As well, gentrification has lead to higher rent costs for many of these small businesses. The same study reported that almost 95% of all small businesses in Chinatown are rented, and at least 75% of these businesses have had rent increases within the past five years. As a result, many of these small businesses have considered relocating or completely shutting down. As shown in the graph on the left, though relocating and shutting down is not the predominant thought in many owners’ minds, it is still something many business owners are considering.
Another major factor contributing to the economy and businesses is the different rezoning plans created for Chinatown. One of the rezoning plans, as reported by the Village Voice, will “push upscale high-rise development from the Lower East Side to Chinatown, and [create] a Business Improvement District that they say would tax small businesses out of existence.” This effort to rezone Chinatown came as a result of the area becoming a major tourist destination. Josephine Lee, a leader of the Coalition to Protect Chinatown that advocates against rezoning, stated, “If you have a whole community that caters to tourists, where will community needs go—the doctors, the grocery stores? Where will residents go? They will be priced out their community.” This rezoning plan allocates land for developers to create more housing for residents, however, Lee notes that the price-tag attached to living at one of these housing establishments may be unreasonable for current Chinatown residents. Gentrification has affected rezoning plans and the business of Chinatown, because land developers and bigger businesses are now recognizing the new market they have at Chinatown. Because many of the old residents are being replaced with a wealthier middle class, big businesses have more opportunities here to make money.
One small business that has 
been slightly affected by gentrification is Yaya’s Tea Garden, located on Chrystie Street between Hester and Canal. The rising cost of rent and maintaining the business has put the business owner, Mindy, through some changes in her menu. For example, because costs were running to high Mindy was forced to switch reward programs for her loyal customers. Her old reward program offered a choice between a free snack or a free drink, but the new one only allows for a free drink. As well, as Chinatown is becoming more of a destination for tourists, her customer base has changed. Her store is conveniently located right next to a Chinatown bus company and often times, many of the bus company customers stop by her restaurant to grab something to eat before their trip. But despite her financial woes, her business is popular among many teenagers and young professionals. Over-crowding is a big issue at her restaurant and forced Mindy to create a time limit of one-hour to her customers. As well, Mindy’s business is quite successful due to the time she takes to connect and chat with her customers.
In response to the problems faced by many business in Chinatown, the Asian American Federation published a report in May 2008 called Revitalizing Chinatown Business, offering steps and advice on what should be done to preserve and increase the Chinatown business environment. The report argues that these businesses should try to capitalize on their economical and cultural assets and to make their businesses more appealing to new customers. For example, the report argues that Chinatown businesses should try to market to a larger audience by replacing signs in the store with English ones. As well, the report argues that transportation issues in Chinatown should be resolved to benefit business. Many of these suggestions have aspects of gentrification, because it incorporates the “new” customer base and customer population. For example, replacing Chinese signs with English signs is an example of gentrification, because it is targeting the new crowd.
