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I did a 2000KM road trip from Shanghai to Xiamen. What is economic downturn look like on the ground in China?
I spent one week driving across the east coast of China, covering a total 2000KM. I started the journey from Shanghai, stayed in Wenzhou, Xiamen, Fuzhou, and Jinhua and returned back to Shanghai, just share few things I saw during my road trip
https://preview.redd.it/tqa0ctgsor8c1.png?width=1398&format=png&auto=webp&s=5d7aa0891a8e8bcefa65d988d7edcf52da0ac68e
1, Road infrastructure is incredible, throughout the 2000km journey, I did not even see a pothole, the motorway is very smooth, almost impeccable. this is a far cry from the crumbling ageing road network in Europe/the UK. The infrastructure in China is head and shoulder above Europe, from road networks, bridges, cities, and top-notch development. However, the service areas on national motorways are really dirty, a bit let down.
2, Cities have all been redeveloped. I was really impressed with the newly developed zones in different cities, new skyscrapers, shopping centres, residential buildings and parks all being built at incredibly high standards, very rare to see these in Europe. Canary Wharf and Wembley in London and Manchester probably are the few new developments that can be compared. Most facilities are well maintained, I see streets are constantly cleaned and building works are being done.
Suburbs of Xiamen, you can rent a one-bed flat in this building for 200USD per month, short rent is about 20-30 USD per night https://preview.redd.it/v5vbp1j3pr8c1.jpg?width=2273&format=pjpg&auto=webp&s=985384f8cd754c1e96492ab5c2bbab1976913c96
3, China offers incredible value for money for holidays. Eating out is very cheap and there is a great variety of choices. Petrol is about 30% cheaper than in the UK. We stayed at a high-end 5-star resort, the resort is amazing, better than most resorts I have been to in Europe, with amazing services but less than half the prices.
​
Incredible development of Xiamen, looks way better than Shanghai https://preview.redd.it/bmz8p4u5pr8c1.jpg?width=4000&format=pjpg&auto=webp&s=cb2626bb1c05e53a2e6271cd82dee5951356b8ef
4, Most shopping malls we have been to are incredibly empty, there aren't many tourists in all the cities we have been. I have spoken to quite a few restaurant owners, resort managers and small business owners, and everyone is telling me the same thing, business was doing very well before Covid, it held up decently during the Covid, but everything took a nosedive in 2023 when China lifted Covid-restriction. I went to a small corner shop in the city centre of Xiamen to buy snacks, the corner shop was pitch dark, and the owner did not turn on the light to save electricity.
5, The centre of gravity of the Chinese economy has moved away from big cities like Shanghai. Shanghai used to be a league of its own in China. Growing up in Shanghai, I always thought every city outside of Shanghai was a dump. Now things have really changed. I actually think Shanghai has fallen behind in many aspects of the cities I have visited. Shanghai has got "European disease" now, it is slow, old and very entitled. Shanghai city and its infrastructure is quite old and it is a lot less dynamic than the newer city like Xiamen.
6, Many parts of the Chinese economy are doing well despite the economic downturn. I visited my school friend who works as a surgeon in a public hospital, he did not notice any changes, his department still gets a big budget and he also received pay raises. Some industries are doing very well in China like electric cars, batteries etc. We stayed exclusively with Marriott Resorts in every city we visited, they were all decently full. Many corporate functions and banquets were taking place in the resorts. We also visited high-end shopping malls in each city, they were quite busy, but these were the only ones doing well.
7, China is overbuilt. Most of the motorways I drove were empty. Along the highways, there are a lot of residential/commercial buildings still under construction, feels like excessive development, how they are going to fill these buildings under this economy? It does seem China has become the victim of its own success. One popular economic theory in China says Chinese people are so hardworking, they have completed all the construction for the next 30 years, there is nothing left to build in China.
We took a sailing boat to get close to a small Taiwan island, behind me are skyscapes of Xiamen https://preview.redd.it/bqnnprlcpr8c1.jpg?width=4000&format=pjpg&auto=webp&s=658243509eaf16bb56021bd0c3a4209b5e8348ff
8, Salary and costs of living are fairly low in Chinese cities but housing prices are still very high. A nice one-bed apartment costs 200-300 USD in the area we stayed in Xiamen, it is very modern and beautiful. Salary is around $700-800 per month for average Joe. But buy a 1000 SF new apartment probably costs you $350,000. Chinese property market is very dysfunctional and it is at the heart of the economic malaise of China
**My thoughts on the Chinese economy:**
The Chinese economy is clearly in the downturn, almost everyone I have spoken to is quite down on the future. One of my school friends is now a high-level manager of a state-owned financial institution, he told me the sentiment on the Chinese economy is bad and the economy has entered a vicious/deflation cycle that is very difficult to stop the downward spiral. The core of the issue is people's confidence and expectations, low consumer spending will feed more into the economic downturn that further worsens consumer spending. But from what I have seen on the ground in China, things are quite stable. The economy is running on lower gears but far from crisis.
Where the Chinese economy is heading is anyone's guess. I can see the Chinese economy roaring back into life should the world economy bounce back given the strong foundation of its economy. However, if we are going to have another global economic crisis, the Chinese economy will enter a free fall.
#local
source
I spent one week driving across the east coast of China, covering a total 2000KM. I started the journey from Shanghai, stayed in Wenzhou, Xiamen, Fuzhou, and Jinhua and returned back to Shanghai, just share few things I saw during my road trip
https://preview.redd.it/tqa0ctgsor8c1.png?width=1398&format=png&auto=webp&s=5d7aa0891a8e8bcefa65d988d7edcf52da0ac68e
1, Road infrastructure is incredible, throughout the 2000km journey, I did not even see a pothole, the motorway is very smooth, almost impeccable. this is a far cry from the crumbling ageing road network in Europe/the UK. The infrastructure in China is head and shoulder above Europe, from road networks, bridges, cities, and top-notch development. However, the service areas on national motorways are really dirty, a bit let down.
2, Cities have all been redeveloped. I was really impressed with the newly developed zones in different cities, new skyscrapers, shopping centres, residential buildings and parks all being built at incredibly high standards, very rare to see these in Europe. Canary Wharf and Wembley in London and Manchester probably are the few new developments that can be compared. Most facilities are well maintained, I see streets are constantly cleaned and building works are being done.
Suburbs of Xiamen, you can rent a one-bed flat in this building for 200USD per month, short rent is about 20-30 USD per night https://preview.redd.it/v5vbp1j3pr8c1.jpg?width=2273&format=pjpg&auto=webp&s=985384f8cd754c1e96492ab5c2bbab1976913c96
3, China offers incredible value for money for holidays. Eating out is very cheap and there is a great variety of choices. Petrol is about 30% cheaper than in the UK. We stayed at a high-end 5-star resort, the resort is amazing, better than most resorts I have been to in Europe, with amazing services but less than half the prices.
​
Incredible development of Xiamen, looks way better than Shanghai https://preview.redd.it/bmz8p4u5pr8c1.jpg?width=4000&format=pjpg&auto=webp&s=cb2626bb1c05e53a2e6271cd82dee5951356b8ef
4, Most shopping malls we have been to are incredibly empty, there aren't many tourists in all the cities we have been. I have spoken to quite a few restaurant owners, resort managers and small business owners, and everyone is telling me the same thing, business was doing very well before Covid, it held up decently during the Covid, but everything took a nosedive in 2023 when China lifted Covid-restriction. I went to a small corner shop in the city centre of Xiamen to buy snacks, the corner shop was pitch dark, and the owner did not turn on the light to save electricity.
5, The centre of gravity of the Chinese economy has moved away from big cities like Shanghai. Shanghai used to be a league of its own in China. Growing up in Shanghai, I always thought every city outside of Shanghai was a dump. Now things have really changed. I actually think Shanghai has fallen behind in many aspects of the cities I have visited. Shanghai has got "European disease" now, it is slow, old and very entitled. Shanghai city and its infrastructure is quite old and it is a lot less dynamic than the newer city like Xiamen.
6, Many parts of the Chinese economy are doing well despite the economic downturn. I visited my school friend who works as a surgeon in a public hospital, he did not notice any changes, his department still gets a big budget and he also received pay raises. Some industries are doing very well in China like electric cars, batteries etc. We stayed exclusively with Marriott Resorts in every city we visited, they were all decently full. Many corporate functions and banquets were taking place in the resorts. We also visited high-end shopping malls in each city, they were quite busy, but these were the only ones doing well.
7, China is overbuilt. Most of the motorways I drove were empty. Along the highways, there are a lot of residential/commercial buildings still under construction, feels like excessive development, how they are going to fill these buildings under this economy? It does seem China has become the victim of its own success. One popular economic theory in China says Chinese people are so hardworking, they have completed all the construction for the next 30 years, there is nothing left to build in China.
We took a sailing boat to get close to a small Taiwan island, behind me are skyscapes of Xiamen https://preview.redd.it/bqnnprlcpr8c1.jpg?width=4000&format=pjpg&auto=webp&s=658243509eaf16bb56021bd0c3a4209b5e8348ff
8, Salary and costs of living are fairly low in Chinese cities but housing prices are still very high. A nice one-bed apartment costs 200-300 USD in the area we stayed in Xiamen, it is very modern and beautiful. Salary is around $700-800 per month for average Joe. But buy a 1000 SF new apartment probably costs you $350,000. Chinese property market is very dysfunctional and it is at the heart of the economic malaise of China
**My thoughts on the Chinese economy:**
The Chinese economy is clearly in the downturn, almost everyone I have spoken to is quite down on the future. One of my school friends is now a high-level manager of a state-owned financial institution, he told me the sentiment on the Chinese economy is bad and the economy has entered a vicious/deflation cycle that is very difficult to stop the downward spiral. The core of the issue is people's confidence and expectations, low consumer spending will feed more into the economic downturn that further worsens consumer spending. But from what I have seen on the ground in China, things are quite stable. The economy is running on lower gears but far from crisis.
Where the Chinese economy is heading is anyone's guess. I can see the Chinese economy roaring back into life should the world economy bounce back given the strong foundation of its economy. However, if we are going to have another global economic crisis, the Chinese economy will enter a free fall.
#local
source
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