What is China REALLY Like in 2024?
Greetings from Guangzhou, China! 🇨🇳 I’m writing this newsletter from the road as I’ve been traveling in Asia for the past 5 weeks. This is an important trip for me for several reasons:
Family - This is the first time I’ve traveled with my wife and 3 kids to Asia. I used to live in China for 10 years (2007-2017) my wife and I met in Shanghai, married in Hong Kong, and our daughter was born in Hong Kong. China has been a very integral part of my life for the past 17 years and it’s quite surreal to now be traveling through the country with my entire family. This is my daughter’s first time to return back to China since early 2017 and it’s my twin boy’s first visit to Asia. My wife’s family lives in Guangzhou and we’ve been able to spend a lot of quality time with our family here in China. It’s been wonderful and the trip has been a great success and something that we will do every year moving forward 😃
Work - As a geopolitical commentator, I study geopolitics every day with a heavy focus on China. As a result, it’s absolutely crucial for me to be on the ground in China every year to observe the economy, community, society, and overall get a feel for what is happening in one of the world’s most important countries that has a tremendous influence on the world. Everyone these days has an opinion about China, so I want to spend time on the ground observing and learning.
Here are 11 Things I’ve learned so far on this visit to China in 2024:
The economy is struggling. There is no denying this and the slowdown can be felt across all sections of the population. I’ve spoken with several factory owners who have said business is terrible, shopping malls aren’t busy with many customers, retail stores are very slow. Overall most people are bearish about the economy and knows there will be some short term challenges ahead.
Real Estate Market is Down. There was once a time in China where real estate was easy and the market could only go in one direction (up) but those days are long gone. I was part of the real estate boom in China myself. I bought a 2 bedroom apartment in Shanghai in 2009 and sold it in 2015 for a profit. But the days of speculating on real estate, buying with an intention to flip for profit is gone. The market is correcting itself and prices have dropped 20-30% from the high. Many people feel this is a good thing as it gives them hope that one day they can afford a house.
Restaurants Are Busy - Despite a slow economy, restaurants are filled and busy. I met with a restaurant owner in Foshan (about 30 min drive from Guangzhou) and he has opened 4 new restaurants in the last 2 years alone. His restaurant is a Western brunch concept with Asian influence and the average price is around 80RMB/person to dine there. He said this has been the sweet spot of success for his restaurants as it’s not too expensive and people are willing to treat themselves to a good meal at that price point.
Coffee is Thriving - The only coffee shop that was around when I first came to China in 2007 was Starbucks, but now there are dozens more brands with thousands of new locations around the country. Coffee is now BIG in China and the China’s youth love coffee. Chinese brands like Luckin and M Stand are becoming very popular throughout the country.
China is a Cashless Society - I don’t take my wallet out with me in China as I only need my cell phone and WeChat app. It’s incredibly convenient and honestly so much more efficient. China is a cashless society and while that seems to scare a lot of people in the West, it works in China well and it’s incredible how much more easy, convenient, organized, and structured your day to day life in China is with this digital economy.
Apps and Coupons Dominate - What’s incredible to observe is with a struggling economy, every restaurant, store, business (and I mean every one of them) is using coupons, discounts, and promotions to get people to come in and buy. As a consumer this is amazing (and probably a reason why restaurants are booming) as you can find coupons online through apps like Meituan offering great discounts on food, hotels, travel, and everything else in between.
High Speed Rail is Incredible - I rode the high speed rail from Guangzhou to Chongqing, traveling a total of 1,300km in around 6 hours. I bought a business class seat on the train and it was incredible. Speeds of 300km/hour, gliding through the beautiful countryside, and seats on the train like a business class flight. Overall you just can’t beat the high speed trains in China, they are amazing and my favorite way to get around the country!
EV Cars Dominate - Around 50% of the cars on the road in China are EVs! 😮 It’s been a remarkable shift in the market and wherever you go there are Chinese EV companies displaying showrooms in places like shopping malls and major intersections. China dominates the EV industry and will for decades to come, watch today’s YouTube video as we discuss Chinese EVs in extreme detail.
China Dominates Tech - Once you visit China you finally understand how dominate China’s tech sector is and why companies like Apple manufacture their products in China. You can’t find a better price/quality ration in tech (and in fairness most products) than China.
People Still More Friendlier than Ever - Chinese people are incredibly friendly and welcoming and as an US citizen who has been traveling to China for 17 years now, I’ve never experienced anything bad from Chinese people. That’s encouraging as despite the US/China relationship being strained, Chinese people are very welcoming to foreigners visiting the country.
Foreigners Visiting China is Rebounding - China recorded 14.64 million inbound trips made by foreigners in the first half of this year, up 152.7% YoY. The number of visa-free entries made by foreigners went over 8.5 million, accounting for 52% of the inbound trips and representing a 190% YoY surge from a very low base line last year. This is encouraging! China’s government has opened up visa fee travel to dozens of European countries and recently added Australia and New Zealand as well. It seems this campaign has been very successful and many people are traveling to China for the first time. Which is absolutely incredible and much needed in 2024 and beyond!
Overall I have many more observations to share and will probably take these and points and add in some additional ones and record a new YouTube video, but for now enjoy this vlog from my recent visit to Chongqing!
Thank you all for the support and talk soon!
Cyrus