‘Have you eaten yet?’
This is a classic phrase.
When a Chinese person meets another Chinese person, they may greet them with these words: ‘Have you eaten yet?’
It’s polite. It’s customary. It’s expected.
But…why? Well, it’s because hunger has been a constant feature in Chinese history:
- Over a historical stretch of 2,000 years, China has experienced no less than 1,800 famines. This works out to roughly one famine a year.
- To add to this, China experienced so much social strife in the 19th century that Western observers called the country ‘the sick man of Asia’.
- So, no doubt, this has led to a certain amount of fatalism within the Chinese psyche. There’s always the grim expectation that poverty is just around the corner. The threat of starvation is ever-present.
China has traditionally considered itself the Middle Kingdom. Source: Wikimedia Commons
However, things appeared to change when China joined the World Trade Organisation in 2001. That’s when the country well and truly became the ‘factory for the world’:
- As foreign capital flooded into China, it brought with it a newfound sense of security. China had become fully integrated into the global system of trade.
- What China lacked in terms of food products, it could safely import. And what it lacked in terms of local agriculture, it could safely improve upon and scale up. So, with such progress in supply chains, perhaps hunger was a thing of the past?
Soon enough, flush with confidence, the Chinese went on an epic spending spree:
- New railways. New highways. New cities. The real-estate sector exploded with astonishing speed.
- As this construction boom got underway, millions of Chinese people left the rural provinces, moving into metropolitan areas, seeking fresh opportunities. This may well have been the largest internal migration in human history.
- Was this the ‘great rejuvenation of the Chinese nation’ that President Xi Jinping talked about?
However, every cycle that has a beginning has an end. And in 2024, the cycle has come indeed full circle:
- In the aftermath of Covid, the Chinese property market has sunk into a deflationary crisis. This is perhaps the worst one yet. And the Chinese people are revisiting a feeling they know all too well. A feeling of deep existential anxiety.
- So they have abandoned real estate. They are now investing in gold. Here’s why it matters for the world…
Your first Quantum Wealth Report is waiting for you:
