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Shanghai

Before Christmas, and as a favour to an old friend I spent a fortnight in China, granted about half the trip was in Shanghai.   Talking about China when you spent most of your time in Shanghai is like talking about the United States after a week in New York.  You have no idea what you are talking about.  My two weeks in the country were to meet "clients" of my old friend, as a company can no longer travel to the country, but me and my wife, as tourists were left mostly alone.   

First, I must say that I had forgotten how beautiful the country is, and the size of the domestic tourist industry.   Shanghai is an amazing city, and since 90% of my time there was spent in the central part, I did not see any of the dislocation mentioned everywhere.   The one aspect that really surprised me was the number of cameras everywhere.   I mean, we complained in London, but in Shanghai and the other cities we visited, it was insane.   

In all I had more than 20 meetings, over the two weeks we were there.  Usually early breakfast, the conversations were surprisingly similar.  I have to say that about half still believe in the China dream, but are taking serious precautions.  What is more important is that out of the 20 meetings I had, there were at least two fakes.   My friend was not in the business of getting money out of China.  I already described how most Chinese businessmen got the cash-out, I could tell these meetings were fake when they asked me for help in getting money out.   I told them that we did not engage in such activities, ever.   I was in China doing due diligence as a favour to a friend.  

The pieces of information I got, and that I am sharing are throw-away comments:

  • One manufacturer told me that about 80% of his staff is female, and that (1,000) the vast majority are between 20 and 30, and where in the past 30% would get pregnant (they still stay in the company), now it was less than 5%.  
  • Single-sex dormitories are increasingly popular, far more than before the pandemic.  Granted 3 years is not a trend.   
  • Prices are falling dramatically, and those who export receive massive subsidies, even privately owned companies
  • The level of state intrusion in the life of ordinary Chinese has exploded, local police will check households to make sure they do NOT have contraceptives...
Of the 22 clients I met, 19 are looking to exit the country entirely within the next 3 years, and only 3 still believe in remaining in China.   Finally, the Chinese government announced that there were 80 million vacant homes in the country.   Now, what is important in that figure is that a home has to be complete and have it certificate of occupation.   Most empty homes do not have their certificate, because of the fiscal implication...

We had a great time because China is still a very impressive country (Well Shanghai is...).   



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