I just got back from an extended weekend trip to my old China home of Guangzhou. I first visited Guangzhou in early-2003 right before SARS and lived there off and on until around late 2012. This was my first extended visit back since well before covid.

I have several friends still living in the city, one works in a large well-known state owned firm in their property development business. Another owns a few restaurants. It was great to catch up with them and see how things are going.

From my perspective, Guangzhou has developed quite nicely...it still maintains its character with massive, old trees everywhere and high density shops in its older districts. At the same time, the quality and quantity of everything has improved.

When I first visited Guangzhou in January of 2003, the Guangzhou Metro's line 2 had only just partially opened a week or two before. The entire system looked like this:

Fast forward ~21 years and it looks like this:

The number of, quality and variety of products, goods and services available saw similar growth. 20 years ago it might be very hard to find certain products or services if they were available at all. Now everything you can imagine is available within a walking distances or by delivery, a few taps on your mobile phone.

Absent are the developing country traffic problems that still plague places like the Philippines and Thailand. There's no waiting 10 or 15 minutes for a Grab...every time I ordered a car on Didi, a brand new locally made EV was waiting for me within 3 minutes. Traffic moved smoothly and drivers no longer drive like madmen. It seems like most cars are now EVs and I even saw self-driving taxis out and about.

From a high-level perspective, Guangzhou has developed very well and it even surpasses so-called developed countries on many metrics. So why did it feel so gloomy?

The friend working in property development told of large scale layoffs in his company because of the decline in housing prices. He had recently went on a business trip and taken a Didi car only to find that the driver was one of his former colleagues.

The friend in the restaurant business was considering closing one of her two locations because business had dropped off a cliff...fewer people were eating out and it was getting increasingly hard for her to make rent, payroll and pay mortgages on her two residential properties.

Walking around on my own, visiting both my old stomping ground and newly developed areas, one take away was how much fewer people there were than in my memory. Some of the new malls, which were carbon copies of malls built by the same developer in other cities or districts, felt very empty.

How much of this was temporary because of people staying home in the cold weather and the proximity to Chinese New Year two weeks early with many residents not yet returned? How much of this is a temporary adjustment of expectations of people regarding the value of the property investments? How much of this is just an indication that China has made it and graduated - at least in tier 1 cities - to developed economy status and the golden days during the 40 years of post reform and open doors policy easy growth and exuberance are over? How much of this is because global geopolitcal competition and monetary tightening? How much of this is payment for covid policies? How much of this is simple hangover from too much debt fueled growth?

As always, I left with more questions than answers. I have no idea what the future will bring, but I hope that my friends in Guangzhou can shake off this gloom so that they can enjoy the well-earned fruits of their labors over the past decades.