When I last visited China in 2023, I left feeling that China was still struggling hard after the COVID-19 pandemic.
With the longest and strictest lockdown policy in the world, it wasn’t surprising that things still seemed very sluggish compared to America.
Many businesses had shut down, a lot of people moved out of the cities to return home, and there was still hesitation to gather in groups.
My trip was somewhat depressing, the lively and energetic China that I grew up with had become a cautious shadow of itself.
Economic and public health concerns still lingered, creating a society that was socially isolated and stagnant.
Now, things are changing.
The 2025 China seems to have put the spectre of the COVID-19 pandemic behind it. Two years ago, the overwhelming majority of people were still masking up in public even despite the lifting of a nationwide mask mandate. Nowadays, masks are still somewhat common, but most people feel comfortable enough leaving home without one. Even with the widely publicized surge of a new COVID strain, many people felt indifferent. Lockdown fatigue had really set in and it would be a herculean task to convince people to quarantine again.
While two weeks in China was not enough to deeply understand what had changed, there were two distinct differences I had noticed, the widespread adoption of AI and growing youth consumerism.
AI Adoption
ChatGPT was released in late 2022 and had already taken America by storm in the summer of 2023 even despite its early limitations compared to the LLM models we have today. In China, ChatGPT was still unknown to the vast populace, some part because access to the model was gated behind the Great Firewall. The Chinese government was not so eager to let their citizens have unrestricted access to whatever ChatGPT may spew out.
Nowadays, I believe LLM use is just as rampant there as it is in America, especially so with the recent launch of Deepseek. In my conversation with a Chinese white-collar worker (my aunt lol), Deepseek was being consulted daily whether it be on SQL queries, or asking it to perform a psychoanalysis on the behavior of her boss after a recent outburst.
Even on the subway while I was peeking at other peoples phones (Don’t worry, I do this in America too!) I saw many people engaging with Deepseek or consuming LLM related content. A major trend on Douyin/Chinese Tiktok was people prompting Deepseek very existential questions like “What do you envy about humans?”. Deepseek’s emotional tirades would go viral on the Chinese internet with many netizens anthropomorphizing Deepseek. This phenomenon also occurs in America where people are also trying to reveal the sentient side of LLMs so it was interesting to see a parallel here.
I think for many Chinese people there is also an aspect of national pride associated with using Deepseek. China had shocked the world by releasing a state-of-the-art reasoning model with fewer resources and a GPU embargo. The country that was renowned for just being able to supply the world with cheap goods had proved its ability to innovate in the field of AI.
While I was able to see firsthand how widespread AI usage had become, I regretfully did not get the chance to understand how Chinese people felt about AGI alignment and AI risk. In America, people are rightfully scared about AI taking jobs and transforming our society in harmful ways. Here, capitalism is going to utilize LLMs to their maximum economic potential, the societal effects on labor be damned.
Did the Chinese citizens, who lived under the watchful eye of the CCP, have the same fears? How many of them worried about the possibility of AGI and what it meant for human intelligence?
These are the questions that linger in my head. The answers to these questions will define China’s actions in the AI Cold War.
Youth Consumerism
To me, the difference between the Chinese economy and the American economy is that Chinese people save more than they need and Americans spend more than they have. It’s counter-intuitive, but a thriving economy is one where people feel like they can spend like no tomorrow. This mentality is what makes Americans different from the world and what has created a consumer culture so strong that it’s as if the rest of the world produces goods to market to the American consumer. In comparison to the rest of the world, the U.S. accounts for approximately 30% of global consumer spending.
In China, it used to be the case that most people grew up in near poverty. When my mother was young, food was still rationed via tickets, every family would only get a few ounces of meat a month. This trip, my grandmother told me that she saved a whole year just to be able to buy my grandfather a bike. As this generation grew up, they held onto their frugal lifestyles. After all, famine was not just something that happens to other people, it could happen to them and at any time.
While saving money is the smart thing to do, it creates a domestic market that is extremely price competitive and slow to grow. That generation was not going to buy $60 Lululemon shorts or $400 for concert tickets. This dynamic made China susceptible to the effects of a trade war. If America stopped buying Chinese goods, China lacked a domestic consumer culture to sustain their economic growth.
However, I believe that youth consumer trends are rapidly challenging the status-quo.
Some of the best performing companies this year in China have been companies that cater towards the desires of urban youth. Blind-boxes, like Labubu, are flying off the shelves and people just can’t get enough boba. Chagee, a popular tea chain, just IPO’d at an evaluation of 5 billion dollars. A huge sum for a boba chain that has only existed for ~7 years, a testament to their rabid fanbase and growing demand. Most notably, they were also sued by Dior for selling bags that looked suspiciously similar to Dior.
Of course, China is struggling with sky-high youth unemployment, something we are starting to see in America as well. However, Chinese youth benefit from low cost-of-living, walkable communities, and the One-Child Policy. An unemployed Chinese Gen-Z can mooch off their parents + 4 grandparents, doordash food all day, blackout at the bar downstairs, spend <$100 on high speed rail to go anywhere in their country, and not have to worry about ever paying a car note.
Okay, maybe I am painting too rosy of a picture here, but this was how I saw it.
Ultimately, I think youth-led consumption will help revitalize the domestic economy and currently gives China more confidence in surviving a trade war with America.
