Location: Qingpu Library, 5 April 2026
So its been officially 3 months since a mandate and appointment here in China; and perhaps about a month since receiving my official residency permit here.
It feels short and long; fast and slow all at the same time; Perhaps it is the lean-in to adventure. Perhaps its the honeymoon period. Or maybe i’m just getting a bit more comfortable without a loss of awe.
It comes at a time when it is popular to talk China: Amidst an era of US withdrawal from looking after the world; and its fractitious domestic and international policies, there is a natural and trendy rise in China’s soft power.
First a bit of context.
I say I am in Shanghai (well, officially I am), but I largely spend the majority of my time not at the Bund, or surrounded by deeptech start-ups; but over in Qingpu, the rural/less urban in-betweeness of Shanghai and Suzhou.
Known for its nature and proximity to lakes; it also allows a more intersting take in active and ongoing development. Its something not lost on me, as a former amateur-demic in industrial policy and economic development from my Government days. More on that on the demand-side later, but first:
Sophistication of Supply
The simple observation is that the ecosystem has gone from being a just a mere contract maker to leadership in brand, design, function and cost.
The more fascinating side is in part how it got there. This was captured very well by a recent article (although having been working in an adjacent industry with insider colleagues, it does not come as a suprise to the open world): https://www.ft.com/content/080062ff-e555-4e88-860c-a693b2148259?syn-25a6b1a6=1.
This has been a natural consequence of policy: learning from overseas customers, particularyl those with sophisticated demand. High tech, tiny tolerances, and a drive towards not just cost but quality at scale.
The article (so well written) captures it well: Combining Japanese craftmanship with Chinese cost and scale. Multiply this across practically every single industry (Indsutrial policy quip: ain’t gotta specialise if your domestic economy is so dang big).
That said - direct, personal experience with Tier 3 city machinery vendors has been immensely frustrating, dissapointing and an absolute challenge. Well placed consideration is still needed.
But its not over: indeed, the tone of the curretn (2026-2030) five year emphasises quality. No longer (and in an anyway unannounced way) does China produce “cheap” only goods. Cheap, good, high quality; and with a domestic and global export supply chain…..it would be interesting to see where this new steady state ends up.
Sophistication of Demand
I won’t go into much more detail on Apple, consumer electronics, cars, batteries which are well known and well documented since the post-covid era… but instead retail and consumer experiences.
Why is that? Well, good brands, technology and manufacturing are a natural follow on from the narrative above. We see this in premium edge products, albeit for the premium market.
My fascination lies instead on the surreptitious creep of the average dude, the normal joe and joelle; and the slow rise in Mazlowe’s hierachy of needs.
No longer are we talking about a Plain Mantou or a meat-stuffed one. But the 3 year observation just opposite the factory i work at: First came Cotti Coffee and then an indie coffee by a chirpy lady-preneur. The latter’s signboard and branding-on-cup talks of wellness, happiness and the indie retroness of simpler times in a westernesque fashion. It reminds me of things I thought i left behind as a student in London; a yoga studio in Singapore.
Who the hell drinks coffee in this light industry area turns unfounded. Both businesses seem to be doing fine
The direct experientia: witnessing the gentrification of what I thought (and to some extent, is) old school Chinese manufacturing. Instead, a sophistication of flavours. Of curisoity.
I note again, in a region that to various shanghainese shanghainese people, has given me comments such as: “Boring with nothing to do”, “I’ve never been there (PS. its a one hour drive away)", “Farms and countryside”.
My foot reflexology therapist chirps on the Iran war.
Insane Pace, Export Ready
This has raised the Sophistication of demand and product and cost of supply to a level where the relentless competition in China has raised the bar even further. Every damn thing. Umbrellas even; are now backed by electronics and sophistication, for something that can cost less than <5SGD.
Every few months on Taobao here (insane conveinece) yields some new fangled gadget that wows me in innovation and tests my need vs want discipline to its limit.
I had felt that “new markets” especially in an age of post-COVID liquidity such as Crypto and NFTs never really served any good. At best, they serve two predominant markets: The “get rich quick” aspiration and the gambling/ dopamine vice. Both fairly exist; but there are limits to scale.
We see here instead the trinity fulfilled: Cost, performance and quality being driven out of the supply chains here. Global consumers will certainly be compelled to buy these.
Domestic Limitations
What might limit this? Similarly, to the US-China studies I looked back in 2017; there remain some foundational issues, largely with east -west; urban-rural inequality. The aging thing too, but I’ve not been well read into the aging issues.
Indeed, despite the overwhelming rise in China’s ability for higher value products has, according to some of my own direct epxerinece, not significnatly raised factory labour prices (not like Vietnam)
A stat/ video(?) by the SCMP I read/watched stated that 1/3 of all workers are in the gig economy.
It’s felt, smelt and heard within the ride hailing I use (I’ve been spoilt by its relative cost comapred to what i get in Singapore). Occasionally, there is a strong waft of body odour. Its not the outside air, for sure.
As a cosnumer, I felt bad at times - dragging a driver from the heart of Shanghai to the outskirts of Qingpu. But my assistant reminds me that its fine and normal: many drivers live in their cars - perhaps they haven’t showered for days.
They chat openly with their family - child voices on the phone. Reminders to sleep. Reminders to study.