(Unedited) Podcast Transcript 557: Emotional Consumption in Chinese Cities

This week on the Talking Headways podcast we’re joined by Olivia Plotnick, Founder of Wai Social in Shanghai China. We discuss her summer trip to over 30 different Chinese cities to experience different retail, the impacts of high speed rail, and the social e-commerce ecosystem. We also discuss how competition has made Chinese retail sharper, electric vehicle saturation, and emotional consumption.

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Um, my school in Oregon was one of the first schools to have a Confucius classroom, and so I started studying Chinese at that time and had the opportunity to come to China for a summer in 2007. That really sparked my curiosity for the country, and I continued to study Chinese in college. I came back and went to university for a bit in Beijing in 2012, and then I moved back to China in 2015, and I have.

I’ve been here pretty much ever since. Um, what was gonna be a few years, uh, has now turned into 10 years. So I work in marketing. I’ve always worked on the agency side, worked for big agencies, and then in 2019 I left Ogilvy and I started my own social media marketing agency. So. We help foreign brands come into China and do their marketing strategy or fall on account management, and really just advise global organizations about China’s digital ecosystem innovation in China, and help them understand what’s going on here in the lens of how people are interacting with technology in that type of ecosystem.

Inexplicable energy, and it was such an interesting place. There seemed to be so much happening and I felt that just multiply. When I came back in 2012, when I studied in Beijing, I just remember feeling this incredible pulse of the city, and at that time, you know, China was going through its its boom times, right?

The economy was growing enormously and things were changing very, very rapidly. So. More than you know, the incredible culture and the history and the language and the people. I think what really has kept me tied to this place is the rate and the speed of change and just the way that things are always different and new and evolving.

Just felt in such stark contrast to what I had grown up experiencing in the us.

And so I’m curious what your perspective is on like the differences between maybe the largest cities you visited early on and what they were then, what they are now.

And in the nineties it was just farmland. There was nothing really out there. And then, you know, within two decades later, it’s now the infamous. The bond the very famous Shanghai skyline with the, I believe it’s the second tallest building in the world. And then you have, you know, the bottle opener and the Shanghai Pearl Tower.

So within the span of just several decades, the cities have changed. Immensely. You had a, a huge amount of the population moving into the cities. You had cities like Ensen, which were basically nothing before, becoming now one of the biggest cities in China. Same with Ong Ching, which is now a, a massive city that didn’t really exist in the way that it did just 20 years ago.

But now what’s quite interesting is you have a lot of people actually moving out from the big cities now and going back to their hometown. So you have a little bit of a reverse migration going on, which is also very interesting when we think about the development of. These quote unquote more rural cities or in China, there’s a tier system.

This isn’t an official classification, like the government doesn’t classify what tier cities are. It’s quite a complicated ranking system. Actually, David Fishman, who runs a really great Substack, has some beautiful articles on how this ranking system. Works, if you wanna dig deeper into that. But basically Shanghai, Beijing, Guango, those are called first tier cities.

And then as you go more west and get more rural, the cities go down to second tier, third tier, fourth tier, fifth tier. And it depends on their GDP and population and a whole number of factors. But now you have the. Emerging cities, so second, third, and fourth tier cities, getting people who had moved to the big cities of Shanghai and Beijing coming back to their hometown.

And these lower tier cities, these emerging cities are now powering a lot of growth in China. So they’re the cities that are having a lot higher GDP growth. They’re the cities that consumers are a lot more optimistic in their cities. Where, you know, the cost of living is a lot cheaper, and so people are able to technically spend more.

Um, the majority of China’s population are actually living in these emerging tier cities, so it’s becoming quite a big focal point, um, in an interesting area for China. Now, everything that’s happening outside of cities like Shanghai, I was having this conversation with somebody recently about the city of Shanghai and cities in general.

Shanghai is an incredibly special city to me. It is. It’s massive. You know, it’s a city of 24 million people and there are so many different. Personalities to the city. You have areas like the BUN and West N Road that are very popular, very touristic, very crowded. And then you can get into areas of the city like swe, which was formerly called the former French Concession.

And this is an area that is lined with these beautiful trees and it’s very quiet and there’s beautiful French style lane houses and it’s very. Romantic, you can ride your bicycle through this area. You know, you’ll have people on the side selling fruit and it feels like a very small place. And you have Jang District, which is a little bit more commercialized, but still kind of has that romantic small city feel.

So there’s so many just different elements to the city that make it very unique and everything is always. Changing and evolving, and especially over the past five years, you know, Shanghai has been through a lot and it has evolved a lot and changed a lot, but it, it still retains kind of this essence of a place that you know, will always kind of be at the forefront or a place that is always pushing forward, change and modernization.

Right. And, but I think generally one of the things that’s important to recognize is that. People view Shanghai as a very, very fast paced city with a lot of pressure. It’s very expensive, very tough for people to live. So when I was speaking to people in third and fourth year cities, and I would usually ask them what their impression of Shanghai is, and that would be one of the first things that they would say is that they were.

Thankful that they didn’t live in Shanghai. They were thankful that they didn’t have the pressures of living in Shanghai. Now, particularly in this specific moment, there’s a lot of issues with the real estate market in China. So housing prices have dropped dramatically, and this has caused real huge pressure on the economy and this.

Particularly true in Shanghai where housing prices were really, really high. So a lot of people invested into real estate. A lot of people in Shanghai have their money in real estate, and so they’re really feeling the pressure. So for people who are living outside of Shanghai. They’re quite grateful that, you know, this huge pressure on on the economy right now is not so big on them because they’re not living in a city like Shanghai.

And you also have this wider pressure in the economy. We call it involution. So this kind of idea of the rat race, this never ending rat race, that doesn’t really give you any benefit in the long run. And I think people really view Shanghai as the center for that, where people are in the rat race. Kind of living a, not a fulfilling life with a lot of pressure.

Not making a lot of money because cost of living is so high and, and the real estate issue. So I think people recognize, you know, Shanghai is a big city. There’s lots of opportunity there, but the feeling that I got this summer from talking to a lot of people outside of the city and all over China was that they wouldn’t move there.

It’s not worth it for them to live there.

But I’m curious, what spurred you to take that trip and what did some of the things that stood out to you going to all these cities in the rest of the country?

And I know from experience that the only way that you can really understand and know China is to experience it firsthand. And so I had this idea to go and really just get a pulse check on as many different cities as I could around the country. And so I dedicated a a time period of two months, and I planned out that I could reasonably get to about 30 cities within that timeframe.

Reasonably, um, maybe means different things to different people. It was pretty physically and mentally grueling to do that type of travel schedule, but I made it to almost every single province around China and my focus was on. Tier two, tier three, tier four cities, and as you said, you know, tracking trends in retail, tourism, youth culture beauty, health and fitness.

So, um, really just trying to understand what consumer behavior looks like in these lower tier cities, and also really understand how these lower tier cities have developed. So when I first moved back to China. In 2015, I was living in a quote unquote small city of about 6 million people just outside of Shanghai in Jamsu Province, and I spent a lot of time going to third and fourth tier cities during that first year.

And so I have a pretty good picture in my mind of what those cities looked like 10 years ago. So I wanted to kind of now, you know, put in my mental map of how those cities have developed and are they just, you know, smaller versions of larger tier cities. Have they followed a parallel track or have they developed differently altogether?

I was really, I don’t know if shocked is the right word, because I don’t know if much shocks me anymore about China, but I found it quite interesting to uncover that a lot of these cities had really developed much faster than I would imagine, and in a different way than. I think first tier cities have developed.

So what I mean by that is a lot of these lower tier cities have now. Very premium malls in them. So 10 years ago, shopping centers were either very, very local shopping centers, or maybe perhaps if it was a larger city, they might have a luxury brand there. But that would’ve have been pretty rare. So you didn’t really have the presence of, you know, foreign brands or even necessarily of more premium brands, and certainly not of many high quality Chinese brands.

Nowadays in these emerging tier cities, you have premium malls, like a Mix C Mall, which will house more premium level brands, not necessarily the big luxury brands, but they could house more premium brands such as like a Solomon or a Hoka are kind of niche premium. Fitness brands, they will have a lot of really high quality Chinese brands, a lot of ev, Chinese, EV brands in the mall as well.

And so now consumers in these emerging tier cities are entering the middle class and they’re being exposed to a totally different set. Of what I would call like aspirational brands or aspirational lifestyle. Then their counterparts kind of came into the middle class seeing, so what they’re coming in and seeing is no longer, foreign brands are the best and the only choice. But they’re coming in and they’re seeing a wide variety of really premium, really advanced Chinese brands alongside a lot of very niche foreign brands as well. So I think that is reshaping kind of consumer behavior and consumer culture in these emerging cities as well.

I, you know, make the comparison to the US so. Admittedly, I haven’t spent as much time in, in the US over the past 10 years, and certainly I haven’t even traveled the US as extensively as, as I have traveled China. But I couldn’t help but to compare, you know, what would be a Chinese third and fourth tier city to what would kind of be a.

An American third or fourth tier city. And I think in the US we still have this mentality of we are the best country in the world. We’re the wealthiest nation in the world. We have the best thing, we have the access. Um, we’re doing things much better than than anybody else. And that is just so not the case.

China has an incredible. Infrastructure is set up. They have an incredible train system. They have incredible highways. They have incredible roads. They have very, very high tech transportation modes. They have incredible digital infrastructure for everything. When you look at just the development of EVs within the country, I think.

The US has a tiny, tiny, tiny fraction of the number of EV charger stations that China has. And one of the things that I was initially tracking on my trip was how the usage of EVs were in each city. Because in Shanghai, just within the past five years, that’s one of the biggest things that a lot of people.

Notice when they come here, you know, maybe they visited pre pandemic and then they come back to Shanghai, you know, in 2024 or this year, in 2025, and that’s immediately the first thing that they’ll say is it’s incredible the adoption of EVs. You know, it’s feels like 90%. Of the cars that you see on the road are EVs, and so I didn’t notice that only in these larger cities.

So I had planned to kind of okay, is does it seem low, medium, or high? And about 10 cities into my trip, I stopped tracking adoption just because every single city it seemed like. The adoption rate of EVs was high. There was no point in where I felt like I could even discern between the adoption rate, especially even in, in these smaller cities.

And that has really been in part too, you know, the government making sure that charging stations were well built out all over the country. And they of course offered a lot of subsidies for people to buy EVs. And there’s, you know, so much competition in the market. Obviously that is good and bad right now.

Um, but that drove down the price of EVs for consumers a lot. So just, you know, looking at that alone I think is quite a stark reality for a lot of Americans to reckon with, of, you know, just when you see the cars on the road and even in cities. That are now testing a lot of driverless cars, a lot of driverless buses and delivery vehicles as well in China, and so that industry is developing at a very rapid pace.

It’s just like amazing what people’s perceptions are and what they’re told by the media overall about what is going on now. I wanna separate like high level political stuff from just like the in-person systems approach stuff that’s going on. Like all of the payment systems that you talked about, digital infrastructure, um, the EVs, when you go to a city, you know, you can see which cars are EVs and which ones are not.

’cause the license plates, one’s green and one’s blue, right? So you can see that all the green license plates on the road. Just little things like even like your navigation app, it’ll tell you how many seconds are left on the light in front of you, and there’s countdown clocks. But even on the ones that don’t, they might tell you how many seconds are left on the clock.

Little things like that, you go there and you’re just like, wow. There’s so much stuff going on here that nobody ever talks about.

So many comments that I got from them was, wow. Looking at all of these more rural cities in China makes me feel. In America, like I’m the one living in a third world country.

I mean, like I was in, you know, maybe third or fourth tier city, second tier cities I was in. Taiyuan and I was in Datong, Zhuhai, but they’re approximate. Like you can get to other big cities that are nearby. But it’s interesting what you see when you’re there in terms of the infrastructure and everything.

And we were driving between Taiyuan and Datong and you could just see all the trains, you know the high speed rail tracks going across. I mean, 48,000 miles is a lot of high speed rail, right? Like they’re gonna get to 50,000 soon, just everywhere. And you can see the corn fields, but then you see the he sea rail and it’s kind of like this juxtaposition that’s quite amazing to see.

The difference is I’m also really interested and, and the reason why I wanted to talk to you too, is what you wrote in the poor, but specifically about retail. I mean, you’re talking about all of these different malls and retail spaces and the United States were overrun almost by chains and by lack of choices, I should say.

You have strip malls, you have the big malls, you have the lifestyle centers, right? Those are the different types of choices that you have. You have outdoor malls, you have downtowns and things that. In some places they’re suffering. In some places they might be doing well here in San Francisco specifically, like downtown’s really suffering.

But if you go out to stonestown, which is on the outskirts, it’s really doing well. And so you have this weird juxtaposition there. But then you go to China and you see all these places. We were, uh, staying in Beijing in a, in a raffles. Property, which is a Singaporean group, but it sounded like the Mixe that you were talking about, which is, you know, they have EV sales, they have all of those brands that you were talking about, the Solomons and the Hokas and the Pop Marts, which I’m gonna talk to you about in a second too.

It also seemed very modern in the, the local Chinese brands. It was very well to do in terms of, I mean, it’s not as well to do as going to Macau and going to some of the places there and having all the Fendi and whatever else that, that’s a whole other level that I’ve seen as well, but. All the, the popup artists and things like that.

Like, it’s just like an interesting experience, especially when you think about malls in the United States. And when I went to China last year, when I went to Jha and Hong Kong, Ji and Macau, I felt like I was back in like 1990s, 1980s mall culture in the United States, which is really a fascinating kind of back in time, but it’s the future as well.

So I’m wondering if you talked to that idea a little bit of like. The mall culture, the differences between these experiences that people have when they go to shopping malls or the places where people congregate.

In Europe you have majority European brands, but in China. You know when it started opening up in the nineties and two thousands, you had brands from Europe and the US and all over the world start to flood the China market because they saw the opportunity, right? So already you have all these brands competing and now you have domestic brands competing at as well.

So. It’s hard to think of another country where there is so much intense competition from brands all over the world and within their own domestic market, so that competition forces innovation, right? And. That’s probably a, a common theme that we can link to for many things for China and why it feels so much farther ahead is because there’s just so much competition within the market.

So it forces things to be better in terms of retail. What’s really interesting now to see. China advanced very quickly in terms of its digital ecosystem. So there are many different social media apps in China, which. Maybe some people are familiar with Red Note from earlier this year. And of course people are familiar with TikTok.

So in China they have pretty much a similar version called, but China has a very, very advanced social commerce ecosystem, which also includes live streaming is very prevalent in China. Live streaming e-commerce is very, very heavily used and far more advanced than, than what’s happening in the West.

And so when you can. Do everything and get everything online. Now it’s more, okay, now what can you do offline? And so brands are kind of starting to have this reckoning of how do we actually engage people offline? And that looks very different to previous models. You know, you just mentioned that when you go back to a mall in the US it feels like you’re going back to the nineties when you kind of compare.

The two. Um, and I completely agree with you, retail in China is now becoming very, very experience driven. And I believe that is going to start being the case, you know, in the West as well. That trend is going definitely global at the moment, but China is already very, very ahead. And so you have these shopping centers and you have these flagship stores that are being built.

Less around. Okay. What is the ROI per square footage of this store and more around this store is a marketing channel. So how can we let the consumer experience our brand universe? In particular, Shanghai does this very, very well. There are many incredible retail experiences in the city of Shanghai. I can give you a few examples.

There’s a store that just opened a few blocks down the street from me that has, uh, a massive. Dalmatian dog flying through the window and this thing is, is huge. It takes up the entire storefront and then you kind of enter the store and there’s this massive, massive dalmatian dog head in the store. And when you enter in the store, each of the fitting rooms is beautifully designed but very, very unique from each other, and they’re built.

Specifically for being able to take photos within them. So the lighting is, is really good and there’s mirrors all around. And then, you know, you go up to the second floor and, and it’s another just beautiful experience. There’s a coffee shop within the store. There’s another store right next to it, which is a.

A Chinese designer. Um, and you go in and, and the store’s really beautiful and they have a little area where you can put headphones on and they’ve recorded this kind of very immersive soundtrack from the designer’s life. So you’re really experiencing the essence of that designer and, and the moment, these experiences are becoming more and more common in Shanghai, and it’s just more about how you build that relationship, how you allow the consumer to experience the brand, because at the end of the day, most likely I may, you know, touch a few products, try something on, but I’ll probably go home and purchase whatever I want from the brands online either.

Through their WeChat mini program or through Tmall, some of these e-commerce sites, because then it will be delivered to my house within, within a couple of hours because that digital infrastructure is all built out. So I think China, for many, many years, we talked about their really sophisticated digital ecosystem, and now I hope more and more people will start paying attention to how stores in China are driving this incredible offline experience, evolution.

In the city itself. I mean, here in San Francisco we’re having problems getting people back to downtown and so that hurts the retail ecosystem as well. And so that creation of experience to. To generate kind of foot traffic to these brick and mortar stores is something that’s really important. We had Kevin Kelly, who’s an architect, who creates these experiences for stores on the show, and one of the things he was talking about is like these stores, a lot of them in the United States anyways, are not gonna be able to compete with the prices of an Amazon or other really large retailers, a target or otherwise.

What he says though, is that like the experience that you create in store is what might drive you to be. Actually competitive. And so it seems like if you’re going to, you know, China and you’re going to some of these malls, like the raffle center that I was at, that experience draws people in. You might not buy anything there, like you said, but it does, you know, create a place where people still have these collisions.

The places where people meet each other, the places where they see at the mall. I actually met a person who listened to the podcast, who lives in China was able to just go to a Starbucks, which is, you know, they’re everywhere as well. And then there’s also competing coffee companies that are taking off too.

I saw a number of Luin or Luckin Luck. Yes.

Because I mean. Cities depend so much on this property tax. Uh, you know, for better or worse, we had another discussion recently about the negatives of that specifically, but, you know, that’s where we’re at right now. And so that’s kind of the direction that we need to go. And I feel like the discussion that you’re having and the discussion that China’s having about this seems in a positive direction from that standpoint.

And attribution is, is also very tricky for a lot of brands, um, to kind of deal with. So I think it will take a, a big shift and it’s certainly not as easy as just. You know, creating a, an experiential store, but I think it’s important to recognize that there does need to be a vast change, I think, in how we view retail and, and how we create spaces for people to connect and experience things.

And so I’m curious about that because it seems very popular. It always. Seems full, um, no matter where in what mall you might pass, there’s even like, uh, digital vending machines where you can get them. That’s very popular as well, like I’m curious about that. As its own thing in China.

Uh, LABU Boo is a Pop Mark character, which just went crazy this summer. There’s a lot of, you know, Rihanna picked it up and the, there’s singer from Black Pink picked it. And then even in the US there were lines outside of Pop Mart locations for when the new additions would drop. So Labu Boo Fever definitely hit global this summer, which is really, uh.

In and of itself, kind of a testament to, we were talking earlier about how strong competition is in China, and that competition is forcing Chinese brands to go global. And when you’re able to be successful in the China market, chances are pretty good that you’ve developed a product so good that you can be successful globally.

And that’s. Really what Pop Mart has done, pop Mart, you know, is very famous for the Blind Box concept. It’s not something that they’ve invented, it’s not a new concept, but they really nailed down the balance between ips. Uh, so Pop Mart will work with a lot of. Really famous IP to do these little characters and develop out a blind box.

So you may have, you know, six or seven potential characters within this IP that you could get. Obviously, the monsters, the lu boo boo one from a a Hong Kong designer became very famous this summer. And so that was the craze. But Hot Mar has really, I think, come along, you know, they had a good formula with the blind boxes.

They did really well with the types of IP collaborations that they’ve been able to do, and they came along at a very important moment in the economy. So right now times are really tough, things are really uncertain and. Hot Mart is kind of that little dopamine hit. It’s not extremely expensive and it gives you a little bit of joy to purchase this, and so it hits that sweet spot.

We use the word emotional consumption a lot, and so for Chinese consumers, things like. Pop Marts, things like milk tea, they really hit those sweet spots of filling that emotional consumption need of something that’s gonna just, you know, make you feel better in that moment. And as you said, for Pop Mart.

Any location that you go into, it doesn’t matter if you’re in Shanghai or if you’re in a third or fourth tier city in China, the stores are always full of people going in and shaking the boxes, trying to figure out which character they’re gonna get. And it’s a whole range. You know, you have young kids, you have people in their fifties and sixties, you know, lining up to get these.

So it really hits, um, a huge target audience. And again, coming back to this like experiential retail element, it’s very experiential, right? You go into the store, you, you know, shake the box, maybe you come out, you trade your character with friends. So they’ve really been able to kind of tap in right place, right time, right mechanism.

The trick for them will be, of course, how do you sustain that momentum? So an IP like Barbie or Hello Kitty that have. Lasted many, many years. That’s quite difficult to sustain. And so now we see that the resale value of Labu Boo is kind of going down. And so a lot of people are pointing to that as, okay, the market is kind of cooling off a bit.

So it’ll be interesting to see if Pop Mark can maintain, or you know, what is the next IP going to be? How are they gonna continue to create this level of newness and cult following, but. Again, I think they do have a really great formula with the blind boxes and you know, you see blind boxes everywhere now in China.

There’s so many people doing them. You go into any little like gift shop or store and they all have blind boxes for sale. But again, it comes down to being able to have that really good IP collaboration that makes them so desirable.

I mean, actually in Beijing when I was there, I was at some of the Huttons and those are actually lower density, which is a little bit different than say some of the other places where, you know, the 30 story building is the norm feels like anyways. And so I’m wondering what that does to the retail market as well.

I mean, you have. A huge number of people in a small amount of space. It must be able to drive people to some of these stores and maybe even open up opportunities for people to open shops that might not otherwise be able to be open. I mean, here in the US we have, you know, strip mall and things like that where you can get less costly retail space, but.

When I was in Taiyuan or was Datong, there’s tons of restaurants on ground floors. There’s tons of small retail shops. There’s shops that just sell snacks that sell everything that you could ever imagine from a snack perspective instead of a grocery store. And so like things like that I’m just really impressed by.

But also I’m wondering how like the density of the place plays into that as well.

There are way too many malls. There’s malls that are. Being constructed as we speak, while the mall right next door to it is barely full, barely has any foot traffic into it. And so the logic behind constructing another mall when the this mall isn’t even full half the time, um, doesn’t really seem like sound logic.

So there is definitely, I think. Currently an over capacity issue that shouldn’t be overlooked. There’s a lot of malls in Shanghai that are, are pretty empty. And so it, it comes back to this idea of like, how do you then create better places where people want to come? Um, there’s a, a really great space in Shanghai.

It’s actually quite far from the city center. It’s called Gate M, and it’s down on the, the west bun area. That is newly opened, but that drives, you know, hundreds of thousands of people to that area because they have built out such a great retail experience and you know, great brands down there. Really, really cool space.

There’s a lot going on. There’s events all the time, but then you have kind of these older style malls, which which are still empty. In lower tier cities, you know, you still have the same problem. There are still a lot of buildings that are empty, and I’m not sure of the prices to rent out these types of spaces, especially in, in lower tier cities.

But I will say one interesting point, that is very coming back to kind of the digital side of things. You know, China does have these apps like Thep or even Xhu and au y, which will all try to drive traffic to these offline locations, and it becomes very, very difficult for these smaller restaurants or smaller mom and pop stores because.

Each one of these platforms is trying to get more traffic onto the platform. So, and they all want people to basically like check in or review a location so that they can have that traffic and then they can have those users on the platform. So what’s, they will incentivize these small restaurants. With is okay if a consumer comes in and if they check in on at your location, give them a coupon or give them a discount.

But you have every single platform doing that. And so the other week I was taking a, a group of executives out to lunch in Shanghai. We sit down and the restaurant, you know, there’s a little sign that says, okay, if you use Shsu to review the restaurant and check in, we will give you a 10% discount. So we do that check in, we get a discount, and they also gave us like a little stuffed animal.

And then on, I believe it was Mayan. If you check in and review, you’ll get free stickers to your table, and then on if you check in, you’ll get another coupon. And so imagine now for that small restaurant, the time and the energy and the resources that they have to spend. Managing all these different coupons and everything coming in and the stickers and, and all the incentives for the consumer to do like that is just a nightmare for them.

But they have to do it because those platforms drive traffic to their restaurants. So they’re basically like beholden to these platforms for traffic. But the competition and the resources that it takes to manage all of these can be so much for these, these smaller locations. So you really run into. I mentioned it before, this kind of like involution and the, this, you know, just intense level of competition with not a lot of return.

It’s like, but nobody ever went into the store and it seemed pretty empty. So it was like, what’s the trade off there? And like, you’re right, like what’s the value to the restaurant of, of spending so much time on this marketing if that’s the way that they have access to people. But then also if they’re not pulling any people in, it’s gonna be their death nail in the end.

And so I’m wondering about that impact about the highs rail, being able to take people from some smaller cities that are surrounding maybe a larger city and maybe taking them in for the day and then coming back out again and like, what does that do for the retail? Of the smaller tier cities versus the larger cities and you know, that transportation impact because it seemed like that was something that I saw happening a few times.

I have this book that I got and, uh, it’s only available in China, but it’s in English. Great. Um, and so I couldn’t find it in any places, but it’s like. The Chinese State railway has their own printing press and they print this book. Amazing. It came out in July to explain the history. So anyways, uh, I’m gonna go through this and we’ll have an episode about it sometime, but, um, yeah, it’s fascinating.

But all of that aside, as a consumer of it, it is an absolutely incredible feat to think about, um, what it has done for the country and how good it works. I mentioned at the, at the top of the podcast that I went to almost every single province in China and. China is roughly the same size of the us. Um, it’s a massive country and I went to 32 different cities.

I took 25 trains to get to all of those cities. I only took six flights during this whole entire trip. I only had to take six flights so I could get to the majority of places around the entire country by high speed rail during those two months. There was only one time that my train was canceled for weather.

Trains were never late. There were never any issues with them. There was never any overbooking. They were all on time. That is just incredible to think about, right? That you are transporting millions and millions of people per day on a system that runs. Flawlessly. So China’s high speed rail is, is absolutely incredible and it has really transformed all of these cities, and I wish.

I hope somebody, you know, does a more in depth study on this because when I talk to a lot of people, you know, taxi drivers or people in third and fourth tier cities, they also brought up on their own unprompted the impact of the high speed rail. Because a lot of these places have only gotten the high speed rail within the past five to 10 years, really?

So it’s still relatively new. This has opened up. Obviously tourism, but a lot of economic opportunity. There’s a lot of people that will work in larger cities like Shenzhen and Guango who live. In cities that are, you know, maybe an hour away by high speed rail in a completely different province. Um, and they’ll every day take the high speed rail for an hour, which isn’t that big.

A lot of people sit in traffic for an hour or two hours in the us. So getting on the high speed rail, taking that for one hour and then you’re in the city. That has also opened up a lot of economic opportunities, allowing people who can’t afford to live in Shenzhen, but still able to work there and get that salary, then bring it back.

It’s allowed for a lot of people to travel and explore different cities and like you said, maybe they take a day trip to Beijing or something like this to, you know, potentially go shopping or bring things back. I don’t know if that necessarily has a huge. Negative or positive impact because e-commerce, um, is so advanced and the delivery system is so advanced in China that you don’t need to, like, you could get anything online delivered within max, like one day, even in, in these smaller cities, maybe two or three days.

But yeah, I just think having the ability for. Jobs or you know, to visit people. Domestic tourism, the high speed rail has completely transformed the country and, and what people are able to do and the potential for people.

I can go back into like my newsletter and find probably 50 50 research papers about it. So, but nobody’s really compiled into one like bigger thing. The other thing I’ll say about it that’s really interesting and that. You know, there’s this argument that you mentioned that’s going on about whether high-speed rail has been a good value for China.

If you look at it from just a pure capitalist perspective of is it paying for itself? Right? And that I think misses the point. And a lot of this social infrastructure and things like that misses the point sometimes in that. You build this for the people to use to go places and make money, but there’s all these unrealized gains from an economic perspective.

They’re out there, but you can’t really calculate them. And so you can talk about, like, say the interstate highway system in the United States and how it’s built out. It’s the same thing with the Chinese height rail. They’ve probably built out the system as big as it probably needs to be, but initially the connections that they’ve made.

Through the first 48 to 50,000 miles are invaluable and that, you know, the interstate highway system in the United States is still paying dividends for people, but you don’t need to extend it to 26 lanes inside of the city of Houston, right? That’s not really necessary anymore, and it’s actually throwing good money after bad, but.

The initial investment in that system was huge for us here in the United States. So I feel like one thing in the United States we’re missing is just that we’re looking for the next thing to be an economic generator, and we’re not looking at the obvious answer in the room, which is high speed rail. You were able to go to all of these cities, these smaller cities.

In the country because you were able to access them through high-speed rail. And I find that that discussion is lacking here in the United States because we’re talking about rust belt cities, we’re talking about cities that don’t have as big a market as say the coastal cities, but if you could run high-speed rail between all these places in the Midwest, if you could run it in the south, if you could run it to all the major cities in Texas, for example, you connect all these places in between.

And that’s the argument we’ve had here in California about the California high speed rail is like, why are we connecting the Central Valley to San Francisco and Los Angeles? But. There’s seven, 8 million people that live in the Central Valley that could benefit. There’s people in the Bay Area in Los Angeles that could benefit from being connected to the Central Valley.

And so all these connections that you make from an economic standpoint, whether the line pays for itself is one thing. The other thing is like those social connections and those connections that are made that may not show up on the ledger, but are actually like really huge. So I’m just so impressed with China and what they’ve done with that, but also like.

Your ability to go to all those cities showed the benefits. And the tourism thing is crazy too. Like we went to the Yong Grottos in Daton and just the amount of people that are there, right? My wife showed me on Red note during the holidays, like what it was like, which we went like two weeks before, but it was like bonkers, like you couldn’t move anywhere.

It’s like probably a million people inside this national park. And so that is bolstered by high-speed rail. It’s bolstered by those travel connections and so. I just find that really fascinating and you see it yourself all the time. How this impacts the country.

They kind of touch on that and Dan Wong came out with Breakneck, which I’m sure you’ve read as well, which also kind of highlights the system that China has been able to build out. And I think, you know, one maybe kind of closing idea or the caveat that I would come out with is like. I think we’ve discussed a lot of how incredible the transportation and the digital ecosystem China has built out and you know, things that are lacking in the US and I think there’s so much that is lacking in China as well.

There’s so much that is lacking in, in the us. One is not better than the other and there’s not really a right or wrong here, but I think the most important thing to recognize is how could we. Use some elements of what is working well or what is benefiting people and putting those together in a society or in an economy instead of just having this overarching view of China is bad.

Um, and therefore everything that they’re doing is terrible and harmful and, and doesn’t work. I think the only way that we get better and improve things is having a more open mind.

I implore people too, because I think it’s really important, I implore people to be able to travel all over the world because it’s important, right? There’s many different stories in many different places. But there’s an interesting story to be told about China and how you can learn. From what’s going on there.

Like you said, it doesn’t need to be us is good, or us is bad, or China’s good, or China’s bad. There’s all the geopolitical stuff that you know, I don’t ever wanna talk about. But there are things that both places can learn from each other. And I wanted to have you on because I felt like you could tell that story a little bit and that experience that you have from being there for so long, and I really appreciate that you came on the show today.