Life in a Chinese Metropolis in 2024: Unparalleled Variety and Affordability Thanks to an Ever-Present Competitiveness That Mire Everyone in Constant Anxiety

Finding myself on the streets of Shanghai for the first time since 2017, I was rather surprised by the vibrancy with which the street life returned to the megacity. With major international news outlets covering the popping of the real estate bubble, the high unemployment rates among the youth, and stagnant wages, it is easy to come to the conclusion that people are less willing to spend the decreasing salaries from increasingly precarious jobs. Yet, despite the anecdotal and statistical evidence that would discourage such development, the streets are seeing more and more shops competing for customers.

And firsthand observation finds that in the Chinese context, plenty of innovation is occurring within what seems to be a rather staid field of providing food and drinks for the masses. For one thing, a string of coffee shops, each more innovative in decor and how they use the coffee beans, inundate the smallest of residential streets of this tea-crazed city. Some are run by major chains like Luckin at less than 1 USD a cup, others by new chains and individual proprietors offering a slightly higher price point, this development is rapidly turning what used to be a firmly tea-crazed country into a coffee one.

The rapid sprouting of these shops shows that in their own ways, China's economic bad news of recent years has led many people to quickly pivot toward thinking of how to turn the negative into a positive. Falling real estate sales mean that rent is now cheap enough and interior decor companies are out of work enough to make the idea of creating a new streetside shop affordable. And with entrepreneurs and banks no longer clamoring for real estate projects as a surefire way to make good returns, they are trying out brick-and-mortar sectors that can pry open people's wallets little by little.

Of course, coffee shops are by all means not the only beneficiary of this economic pivot. Innovation has led to ever-creative ways to come up with new flavors in new cuisines and snacks. Bubble tea shops and restaurants of all backgrounds have occupied spaces left behind in shopping centers by luxury boutiques that no longer cater to the needs of the financially anxious masses. With the government continuing to build transport and power infrastructure as well as enacting policies to encourage the hiring of new graduates, the food and drink industry is in a position to reduce supply chain, energy, and labor costs.

There are, however, only so many positives you can spin from the rapid growth and innovation of the Chinese food and drink industry. Behind the reality of so many shops serving innovative coffees, teas, and suppers is a reality that they are still not innovative enough to truly move the needle on the overall economic environment. Their sheer number can be interpreted as a sign that there are now too many investors who are chasing returns in this industry because there just are not so many good ones in other industries worth their investments.

It is simply untrue to argue that China's innovation has fallen so much that people gloat about new coffee products. If anything, the sheer prevalence of electric vehicles in Shanghai (and Shenzhen, where I also visited) shows that the government's emphasis on "hard tech" is showing results at the grassroots level. But no matter how cheap cars get in the EV-dominant world, the fear of losing one's job and a deflationary spiral (first and foremost in an EV industry with overcapacity) is driving many to shift consumption from big-ticket items like cars to the every day like coffees.

Entrepreneurs on the mainland are worried, as they should be. With so much money chasing so few innovations, whether in food or tech, a hypercompetitive environment quickly erodes any prospect of consistent returns. With revolutionary ideas for innovation few and far in-between, many are instead concentrating on taking the innovations that succeeded in China abroad in the hopes of higher returns. The instinct is logical economically, just not politically. With the richest consumers in the world all living in countries seeking to decouple from China, the blue oceans exist but are not so accessible.

The verdict? Shanghai is a great place to live for the materialistically concerned consumer, less so for entrepreneurs and workers caring more about their present and future incomes. Getting a different 1 USD coffee and 3 USD dinner delivered to your 100 USD a night five-star hotel 24/7 a day is now a reality. But few, even among those who can easily afford this lifestyle, can really enjoy it in peace. For more than anywhere else I have seen in the world, the Chinese public is anxious about how long their individual talents, roles, and industries can remain competitive in an ever-changing world.