China notes (3/3): Hangzhou

Arrived in Hangzhou for my last day and a half. Alibaba has installed what looks like a mini data centre in the Arrivals terminal just to be not at all subtle about where you are. There is an adopt-a-cow campaign running which I can’t tell is real or spoof.

Driving through the city on a dark, wet and misty evening with incredible buildings (and notably incredible lighting), it was a fairly intimidating welcome alright.

Went out for a walk to find some dinner. Total absence of westerners. Walked into the restaurant and the greeting girl actually did a full double-take when she saw me.

This is one of the local specialities: pork belly in a sweat treacle sauce. It’s unclear what flavour role the egg is meant to play but it seems to be a critical inclusion in every version of the dish I saw. Like many regions in China, the vegetable side-dishes are often the real stars. This was a mixed dish of chopped wild garlic, other greenery and tofu bound with some sesame oil. Magnificent.

I had ordered a couple of other dishes but someone came racing out of the kitchen to protest the sheer volume for one person. We compromised on some duck which had been cooked with an amazing smoked tea-like lacquer.

China feels decidedly less alien than the last time I was here. I think that’s down to a couple of things: how much more consumerist it’s become (so it looks more understandable to my eyes) and how comfortable everyone now is to communicate through translation apps (this is largely down to the new generation that are commonly running shops and restaurants). Ironically I feel it’s become 100x more accessible just as all the westerners seem to have stopped going there.

I am not a car guy. But I would fully buy a Huawei car if I could do it next time I upgraded my phone.

Tuesday

Took a walk around Hangzhou’s West Lake while on a call to someone in the US. I’ve been pleasantly surprised by how much my western working stack (gmail, slack, WhatsApp etc) basically works completely fine here with a VPN set-up, or often just directly on my cell data connection.

I am confused by chocolate here. On one hand I paid about £5 for a small selection of artisan truffles (about half a car journey to the airport) which makes sense as I understand current cocoa commodity pricing. But then on the other hand I stumbled upon an exhibition of dinosaur skeletons entirely sculpted from chocolate and I feel there is an arbitrage I’m missing.

I reset my economic and flavour palate by finding a tiny bakery which sells what I think are scones but which turns out to be corn bread. It costs about ten pence.

Retail is so interesting to study here. The lack of general consumption (in an economic sense) is a well documented (and high priority government) issue and the new malls seem deliberately designed to address that (speculation though, I must research more). Having been in a few across my three city tour, it’s always interesting to see the emerging brands section (often tucked into the lower floors somewhere). Curious whether this is a state policy or just normal commercial practice. This morning I was in an emerging brand section which had basically turned into an entire mini-mall focused on tweens/young teens.

Of course, maybe I’m totally wrong about this. From the FT:

“There is an ideological hardwiring at the top of the Chinese hierarchy to favour production over consumption,” says Daleep Singh, a former White House adviser under Joe Biden who is now chief global economist at PGIM, the asset management group. “China will continue to rely on the rest of the world to absorb their excess production because the domestic political cost of empowering their own consumers is too high.”

Perhaps, although I think the success of China’s domestic car industry might contradict this point somewhat.

I covered a lot of ground across the city today, especially in retail and some more tourist spots. I saw less than half a dozen westerners. Granted Hangzhou is probably not an obvious destination but still. I check my observation with the guy who runs the coffee shop I’m sitting in who says that most tourists he encounters are now from Japan, Singapore and sometimes France and Italy.

I never think of China as a food-first culture but it absolutely is. As much as (indeed moreso in many ways than) Italy or Spain. For my last evening, I did a little food crawl in a night market. It is of course magnificent. I leave this trip understanding Fuchsia Dunlop’s obsession a lot more.

On the way back to the hotel, I contemplate which specific demographic this startup was targeting with its range of electric mopeds.

And so ends a far too quick sprint around China. I’m going to write up my general reflections in a different post. I’m so glad I came -I think it’s so important for any founder or investor in the west to actually visit and see China in person rather than just reading about it (with apologies to Dan Wang).