Speaker 1: Hello, and welcome to another episode of the All Thoughts podcast.
Speaker 1: I'm Tracy Allaway and I'm Joe. Joe, it feels like
Speaker 1: everyone is a logistics expert nowadays. Yeah, everyone was an epidemiologist,
Speaker 1: and then everybody became a dredging expert, and now everyone
Speaker 1: is just a logistics expert for all. I mean, I
Speaker 1: am joking, but there there there are a lot of
Speaker 1: people in China specifically that have been forced into becoming
Speaker 1: actual logistics experts because of the lockdowns that happened going
Speaker 1: on now for in some cases over a month in
Speaker 1: places like Shanghai. Yeah, this is a this is a
Speaker 1: really good point. So when people joke about everyone becoming
Speaker 1: an expert, usually they just mean they're an expert on
Speaker 1: Twitter or whatever. But for people who have to think
Speaker 1: about how do you get food or how do you
Speaker 1: distribute food and other key supplies during a mass lockdown,
Speaker 1: becoming a logistics expert actually is not just about tweeting.
Speaker 1: It's about serious steaks. Yeah. So, just to set the stage,
Speaker 1: various parts of Shanghai have been in lockdown again in
Speaker 1: some cases for I think up to six weeks something
Speaker 1: like that. The citywide lockdown has been ongoing for about
Speaker 1: a month since the start of April. And what's been
Speaker 1: happening during that is, first of all, the government does
Speaker 1: deliver some groceries and needed supplies to people, but residents
Speaker 1: who are affected by the lockdown can also try to
Speaker 1: organize their own deliveries of essentials. And it's a phenomenon
Speaker 1: called group buying. It's something that's actually existed in China
Speaker 1: for a while now. It's not necessarily lockdown specific, but
Speaker 1: it has seen a I don't want to say a renaissance,
Speaker 1: but it has become a very vital part of actually
Speaker 1: getting supplies. So today I'm very excited we're going to
Speaker 1: be speaking with someone who has been personally involved in
Speaker 1: group buying for their residential complex, someone who has had
Speaker 1: to learn the intricacies of logistics and practice them on
Speaker 1: a day to day basis. This is it is gonna
Speaker 1: be really interesting. There's been a lot of I've seen
Speaker 1: various threads of people talking about what's available and going
Speaker 1: on the apps that they normally used to buy groceries,
Speaker 1: and every once in a while they are able to
Speaker 1: find something, but often not, sometimes are able to get
Speaker 1: a little bit of fresh food, and people post images
Speaker 1: of what they're able to get in. But how this
Speaker 1: is all working, what the actual processes, how the big
Speaker 1: companies and uh the sort of delivery system is working.
Speaker 1: I still don't have a great understanding. So I'm looking
Speaker 1: forward to hearing how what's going on in practice, yep,
Speaker 1: and it might become information that's more useful to even
Speaker 1: more people at the moment, because of course there is
Speaker 1: a lot of chatter that Beijing might go into lockdown
Speaker 1: soon as well. And we are recording this on April,
Speaker 1: So without further ado, let's bring on our guest. We're
Speaker 1: going to be speaking with David Fishman. He's a senior
Speaker 1: manager at the consulting firm Lantau Group over in Hong Kong,
Speaker 1: may my former abode, and he's currently based in Shanghai.
Speaker 1: So David, thanks so much for coming on, all thoughts,
Speaker 1: thanks for having me. Guys, Maybe just to begin with,
Speaker 1: could you maybe set the scene for us, what exactly
Speaker 1: is group buying in China? Um? Yeah, sure so, and
Speaker 1: its most pure basic economic sense, I guess group buying
Speaker 1: is a bunch of people getting together and using the
Speaker 1: power of volume to UH to secure a good deal,
Speaker 1: to secure a lower price or to incentivize a vendor
Speaker 1: or a supplier of something to maybe service an area
Speaker 1: that they wouldn't normally at a price that they wouldn't normally,
Speaker 1: because now you have the power of a larger group
Speaker 1: of people all buying together. Well, can you, for our
Speaker 1: listeners to set the scene, describe roughly your living situation,
Speaker 1: like how big of a building is it, Like how
Speaker 1: many unit residences and a little bit about like a
Speaker 1: sort of like day to day pre pre lockdown, what
Speaker 1: your current environment is like, Yeah, sure, So, I mean
Speaker 1: I live in an apartment community in Shanghai, a pretty
Speaker 1: normal standard i'd say middle class maybe upper middle class
Speaker 1: apartment community. There's there's twenty five floors in this building.
Speaker 1: Each floor has I think seven units, uh, and our
Speaker 1: apartment block has two buildings like that. It's it's on
Speaker 1: the smaller side, I would say, definitely for an apartment
Speaker 1: community in China. So we've got twenty five times seven
Speaker 1: times two is how many households we have an hour's yeah, yeah,
Speaker 1: And you know, some people are living in Shangha has
Speaker 1: got a big variety of different types of architecture and
Speaker 1: different types of living conditions. Some people are living in
Speaker 1: these massive, sprawling thirty thirty buildings times thirty stories type places. Uh,
Speaker 1: and other people are living in you know, much older construction,
Speaker 1: much older buildings. Maybe their whole community has just you know,
Speaker 1: eight households. So when the city first went into lockdown
Speaker 1: or when you were first affected, what was the supply situation? Like,
Speaker 1: what was your initial reaction. Did you immediately go out,
Speaker 1: you know, as we all did in Hong Kong and
Speaker 1: the very early days of and start buying toilet paper
Speaker 1: and rice and things like that. Did did you have
Speaker 1: time to stock up? The folks over in Putong had
Speaker 1: about a day or two uh notice, and that meant
Speaker 1: we had about a day or two plus four days,
Speaker 1: so we had about six days notice. I've been through.
Speaker 1: I mean I was in shen Jen in and so
Speaker 1: we had a lockdown of sorts in shen Jen But
Speaker 1: that was that was different because we were able to
Speaker 1: leave the house and go out and buy groceries, you know,
Speaker 1: once every two days or something like that. The grocery
Speaker 1: stores were still functioning. Uh, there were still some deliveries
Speaker 1: going on. So it was a cessation of activities, but
Speaker 1: it wasn't a full you know, stay inside your apartment community,
Speaker 1: stay inside your apartment all the time. So this time around,
Speaker 1: we bought some stuff. We went out and you know,
Speaker 1: picked up a few things just to make sure we
Speaker 1: had a normal amount of food, but not that much
Speaker 1: because you know, it's only four days originally and it
Speaker 1: didn't seem like, you know, we didn't think at the
Speaker 1: time that it was going to be at ten or
Speaker 1: a fifteen or a twenty day or were you know,
Speaker 1: we're at twenty six days now. So we bought, i
Speaker 1: would say, a reasonable amount of food for you know,
Speaker 1: four days of not being able to get your favorite stuff.
Speaker 1: And that's about it. What did they tell you or
Speaker 1: when when when they say, okay, you're going to lock on? Like,
Speaker 1: what did they established as the rules? How are they
Speaker 1: communicated and how are they enforced? So when it came
Speaker 1: to what does a lockdown mean, uh, that was communicated
Speaker 1: really through kind of municipal level announcements. We understood already
Speaker 1: from other buildings and compounds that have had this quote
Speaker 1: unquote lockdown that it would mean that they're the barrier
Speaker 1: between their compound and that the street would probably be
Speaker 1: closed and they'd say, hey, you know, you can't come
Speaker 1: by here. There's going to be some type of shelf
Speaker 1: there for delivery drivers and packages to be placed there,
Speaker 1: and then you can come and pick it up. And
Speaker 1: we've got this kind of membrane between your big front
Speaker 1: gate and the outside world. So that's that's what we
Speaker 1: understood lockdown to be at the beginning. That was communicated
Speaker 1: through through you know, municipal level announcements and then kind
Speaker 1: of propagated down to individual community levels, the lowest organization
Speaker 1: level being you know, the neighborhood committee or the local committee.
Speaker 1: So the local committee at that point, UH used kind
Speaker 1: of people that they knew in the building already and
Speaker 1: volunteers and kind of the power of people adding people
Speaker 1: to pull everyone in our building into a we chat group, UH,
Speaker 1: an instant messaging we chat group that we could use
Speaker 1: to notify everybody, you know, at this time on this day,
Speaker 1: we're going to be entering into our lockdown. So once
Speaker 1: the group we chat group was set up, how long
Speaker 1: was until people were doing group buying for supplies? How
Speaker 1: did that get started? By the time I was pulled
Speaker 1: into the big group we chat group, we had already
Speaker 1: established a group buying group, a separate group buying group.
Speaker 1: So we wouldn't clutter up the main group. So maybe
Speaker 1: I guess it was probably immediate. Uh, and and so
Speaker 1: we said, yeah, the big group that should be used
Speaker 1: for just announcements about testing and lockdowns and things like that,
Speaker 1: let's let's keep the group buying and all that commercial
Speaker 1: activity in our group buying groups. So it was pretty
Speaker 1: much immediate. But what happened because I've seen conflicting reports
Speaker 1: about what is even possible and people talk about going
Speaker 1: on the various grocery apps and sometimes they say, oh,
Speaker 1: there's nothing available, there's nothing that can be delivered. I
Speaker 1: can't get through. Sometimes people talk about there is a
Speaker 1: little bit. It's one thing to be able to buy,
Speaker 1: say you want to buy in a group, but what's
Speaker 1: available and what has the process been like? Yeah, there
Speaker 1: was definitely an evolution to that. So remember the first
Speaker 1: couple of days, it was already planned, right, everybody had
Speaker 1: bought four or five days of groceries, and even on
Speaker 1: the second day there was a government parcels. So nobody
Speaker 1: was really freaking out at day two or day three
Speaker 1: or even day four. It was when the cases were
Speaker 1: still rising, say day four, day five, and our lockdown
Speaker 1: had him been lifted, and it had become increasingly hard
Speaker 1: to use the grocery delivery apps because you know, the
Speaker 1: first couple of days, people had stockpiles, they had food
Speaker 1: stored up, they weren't necessarily ordering food that day, so
Speaker 1: you could still get orders through the couple main grocery
Speaker 1: delivery apps that were available. But day four, day five,
Speaker 1: everybody was trying to use them and it was just
Speaker 1: a huge bottleneck. At that same time, most of the
Speaker 1: group by vendors hadn't quite responded to the growing demand yet,
Speaker 1: So at that moment you weren't getting anything through the
Speaker 1: standard grocery delivery apps, and group by offers were pretty limited.
Speaker 1: There's group by platforms out there that are always offering stuff,
Speaker 1: but they couldn't get stuff into Shanghai, and the phenomenon
Speaker 1: of the sho High only group buy offer hadn't really
Speaker 1: emerged yet. So there was a couple of days, you know,
Speaker 1: I would say like the sixth, the seventh for us,
Speaker 1: where there was a lot of real concern because it
Speaker 1: just didn't seem like any avenues, any channels we're going
Speaker 1: to be able to bring us food. What is the
Speaker 1: Shanghai only group buying offer? Because I've heard some talk
Speaker 1: of this. There are these different types of group buying
Speaker 1: requests that go out, So you have sort of citywide
Speaker 1: group buying, and then you also have I think fantasy
Speaker 1: buying where people put like long shot items that they
Speaker 1: would really like to have, like burgers from shake Shack
Speaker 1: and things like that. Yeah, I think I think I
Speaker 1: know the uh what you're referencing here. So definitely at
Speaker 1: the beginning, when group buying was becoming prominent, but nobody
Speaker 1: was really sure what was out there, people would say, Oh,
Speaker 1: I'd love to get you know, X item. I'd love
Speaker 1: to get a delivery of shake Shack. Does anybody know
Speaker 1: if shake Shack is still open? Can we buy in
Speaker 1: bulk from shape Shack? And they weren't. This would be
Speaker 1: me by the way, during the lockdown, yeah, Or or
Speaker 1: a more practical one that keeps coming up is like,
Speaker 1: can somebody group buy some like hair salon some guy
Speaker 1: to show up inside our you know, a team of
Speaker 1: guys to show up inside our building and give everybody
Speaker 1: haircuts because we really need it now. Uh. That's that's
Speaker 1: a good fantasy. But no, at that time, Uh, the
Speaker 1: only things that were available for real besides these fantasy
Speaker 1: ones was you would go on for example, will say
Speaker 1: like um, which is a brand underneath pdd pindled big
Speaker 1: Chinese tech platform, and you would go on there and
Speaker 1: you would see all these group buy offers and they
Speaker 1: would say, you know, for noodles or rice or bread
Speaker 1: or wherever. But they couldn't actually get into Shanghai because
Speaker 1: the highway exits leading into Shanghai from outside of the
Speaker 1: city had checkpoints and it was a one way trip.
Speaker 1: If you came into Shanghai, you couldn't leave again because
Speaker 1: it was a city under lockdown. So at that point,
Speaker 1: either you could find a vendor already in the Shanghai
Speaker 1: city limits, or you could find a vendor I guess
Speaker 1: who was willing to make a one way trip. Otherwise
Speaker 1: there was there there were no or very few options
Speaker 1: for Shanghai group buys. Eventually, these big commercial platforms they
Speaker 1: started clearly noting I like quiet Twine would have limited
Speaker 1: only to Shanghai, can deliver within twenty four hours thirty
Speaker 1: six orders of noodles, you know whatever. Uh, They would
Speaker 1: start noting very clearly that it was only available for Shanghai.
Speaker 1: Those are the big tech platforms. Besides that, you also
Speaker 1: had just hustlers, right, people who knew somebody who knew
Speaker 1: somebody who has a warehouse out in the suburbs, and
Speaker 1: the factory workers are close by, and the warehouse workers
Speaker 1: are sleeping in the warehouse in tents, and they can
Speaker 1: get you an order of food if you place an
Speaker 1: order through each head something like that. That was there's
Speaker 1: a couple of different models. So how do you coordinate
Speaker 1: with the other households in your complex? And how did
Speaker 1: what's the process of Like is someone deputized to actually
Speaker 1: place the order? Like what is that process work? Like? Yeah,
Speaker 1: there's two different ways to do that. Uh. The the
Speaker 1: more functionally smooth one, certainly is to have the uh
Speaker 1: the app, the software platform quiet Town or another one
Speaker 1: set up kind of like a shopping cart. They already
Speaker 1: have their shopping cart software set up, and so then
Speaker 1: you go in there, you choose the things that you
Speaker 1: want from the group by vendor, you click check out,
Speaker 1: You make sure you write down your address the building
Speaker 1: that you're in, and then you you spam it. You
Speaker 1: send it out into the wheat group and you say, hey, guys,
Speaker 1: I just placed an order on this platform. We only
Speaker 1: need thirty nine more people to place an order on
Speaker 1: this platform. Once we get forty orders, they'll ship it
Speaker 1: all to our address. Please just go by, go by
Speaker 1: through this platform. That's the that's the smooth, technologically enabled way,
Speaker 1: that's more preferable. The less smooth, less technologically enabled way
Speaker 1: is one person me for example, or another group leader.
Speaker 1: The group master is the single point of contact. You
Speaker 1: contact the vendor, you pay the vendor a lump sum,
Speaker 1: and then you're responsible for individually collecting money from all
Speaker 1: the people in your building. I've done both ways. Just
Speaker 1: the topic of payment, it is non payment ever an issue?
Speaker 1: Do people say you know, I'm interested and then they
Speaker 1: don't pay or is it technologically impossible for that to
Speaker 1: happen because everything is going through you know, things like
Speaker 1: the red Envelope app where where you can make individual
Speaker 1: payments on on we Chat and stuff like that. Well,
Speaker 1: for the technology enabled ones that are going through the platform,
Speaker 1: that's all, you know, all very smooth. If you pay,
Speaker 1: you get what you received, uh, and if the order
Speaker 1: doesn't mean it's minimum requirement, you get refunded, no problem.
Speaker 1: When stuff goes through me. Yeah, we're operating a little
Speaker 1: bit on the honor system for the first couple of orders,
Speaker 1: I insisted on collecting all the payment first before I
Speaker 1: or you know, ninety percent plus of the payments before
Speaker 1: I felt comfortable making the ball order. But after a
Speaker 1: couple of times of it all working out, okay, I
Speaker 1: felt more comfortable just kind of putting my neck out
Speaker 1: there and going out first and placing a big order
Speaker 1: for like a thousand bucks of apples or something, and
Speaker 1: then counting on the fact that my neighbors are going
Speaker 1: to pay me back. Now, of course they might not,
Speaker 1: but it's an enclosed environment. We're all neighbors. We all
Speaker 1: know each other. Now, you know where they live? Yeah, yeah, exactly,
Speaker 1: right down to the room number, because I'm delivering the
Speaker 1: apples to it. Uh so, yeah, it's it's on the
Speaker 1: honor system for that second one. And we haven't had
Speaker 1: any real problems. Well, what is the you know, so
Speaker 1: obviously for any of this to work, there have to
Speaker 1: be individuals that aren't in lockdown and people who can
Speaker 1: make the deliveries, and people who can operate the factories
Speaker 1: or the you know, the grocery delivery centers. You know. Obviously,
Speaker 1: in the US, when there were cities that had quasi lockdowns.
Speaker 1: I mean, we never had like real lockdowns here, but
Speaker 1: there were people who are designated it, you know, the
Speaker 1: so called essential workers. How has the government they're sort
Speaker 1: of established, who can even be in a position to
Speaker 1: go around the city and make deliveries? Yeah. Sure, so
Speaker 1: at the beginning, it was almost no one. That's why
Speaker 1: we ran into the the issues that we did at
Speaker 1: the very beginning, where we had an extremely last mile
Speaker 1: delivery centric model, right, just tens of thousands of last
Speaker 1: mile delivery drivers all pretty much all removed from the
Speaker 1: street or maybe just working on a skeleton crew of
Speaker 1: five percent, three percent something like that. As the days
Speaker 1: went on and it became apparent that this was going
Speaker 1: to last longer and that the the last mile delivery
Speaker 1: guys had become a huge sticking point in the system. Uh,
Speaker 1: the major tech platforms, your Jingdong, your Ilama, your your
Speaker 1: Ma Twine. They recalled lots of workers who were previously
Speaker 1: in lockdown with their families and said, please come back
Speaker 1: to work. We'll give you benefits and perks and overtime
Speaker 1: pay and you can stay in a hotel and you
Speaker 1: know whatever perks they promised them. They called in drivers
Speaker 1: from other provinces as well to try to bolster their workforce.
Speaker 1: From the management side, I know these guys are required
Speaker 1: to get a test every day and maybe also an
Speaker 1: rapid antigen test once or twice throughout the day, and
Speaker 1: they have what's called a punic and junk like a
Speaker 1: travel permit specifically for logistics drivers and delivery drivers that
Speaker 1: you need to maintain a green a green code on
Speaker 1: so that you can keep driving around all day. In
Speaker 1: the last couple of days, I know that they've just
Speaker 1: mixed up the system for that and they are acquiring
Speaker 1: a different system for the delivery drivers, and a lot
Speaker 1: of the guys didn't get it updated in time, and
Speaker 1: so today we heard some stories of drivers being turned
Speaker 1: away from compounds because they showed up the gate they
Speaker 1: didn't have the new code set up yet, and the
Speaker 1: you know, the gate guard said sorry, we've got orders.
Speaker 1: Go go away, come back with your new code. In general,
Speaker 1: what sort of adaptation have you seen from businesses, because
Speaker 1: you know, anecdotally I have seen some talk of small
Speaker 1: scale fruit sellers, you know, type of people who used
Speaker 1: to have stands outside on sidewalks, maybe those converting into
Speaker 1: a pure sort of web based selling model and things
Speaker 1: like that. Have you seen the major platforms and the
Speaker 1: small scale grocery shops have those adapted to the new situation.
Speaker 1: Oh yeah, absolutely, with with different channels and different products.
Speaker 1: So for a couple of examples, you know my my
Speaker 1: neighborhood coffee shop right across the street. I used to
Speaker 1: go there and get a latte almost every day. Now
Speaker 1: they do bulk orders of fresh milk and coffee beans.
Speaker 1: And I assume they're acting as a front for one
Speaker 1: of their vendors, one of their suppliers, right they you know, Hey,
Speaker 1: I'm I'm now the last mild delivery point. Uh let
Speaker 1: me know if you need a bull quarter of thirty
Speaker 1: six bags of coffee beans, and I'll set that up
Speaker 1: for you from my vendor. So that's one example. At
Speaker 1: least he's still doing stuff related to his actual business. Others,
Speaker 1: you know, you'd go on on matoon delivery and you'd
Speaker 1: open up what used to be a crayfish restaurant or
Speaker 1: uh you know, ah, you know, some skewers or something
Speaker 1: like that, and you open up and they're selling eggs
Speaker 1: and packages of fruit and and fresh fresh fresh pork
Speaker 1: or something. Right like they've got totally different business models now,
Speaker 1: and they're just maintaining the fact that they still have
Speaker 1: a storefront. They still have a listing on the May
Speaker 1: to one delivery app, or they'll just have a product
Speaker 1: listing that says doing offline business only. Please add this
Speaker 1: phone number and we'll discuss on we chat what we
Speaker 1: have for sale. They're doing everything they can to try
Speaker 1: to get the message out what they have for sale,
Speaker 1: even if it's totally unrelated to what their business used
Speaker 1: to be. Yeah, that definitely happened here during spring of
Speaker 1: You see restaurants, it seemed like a mix like you'd
Speaker 1: see restaurants essentially just selling groceries. You will also had
Speaker 1: commercial food wholesalers whose customers were typically restaurants, uh suddenly
Speaker 1: offering retail and so like you could buy like you know,
Speaker 1: hundreds of pounds of like duck fat or something something
Speaker 1: that would typically go to a restaurant. I'm curious also,
Speaker 1: like how a little bit more about how the informal
Speaker 1: buying on when you have to use uh weed chat
Speaker 1: or you just have to get a message out to
Speaker 1: someone like usually say, like the people sort of like
Speaker 1: hustling or scraunging things up from a warehouse, Like how
Speaker 1: do you like find those people and like build those
Speaker 1: connections and how how does the weed chat based commerce work? Um? Right,
Speaker 1: So the wee chat based stuff, it comes from a
Speaker 1: variety of channels. Sometimes it's a friend of a friend,
Speaker 1: somebody says, hey, this guy is selling vegetables. Just add
Speaker 1: him and ask him what's going on. Or maybe it's
Speaker 1: somebody in your neighborhood. It's, you know, generally a good
Speaker 1: practice as you become a frequent guest of various businesses
Speaker 1: in your neighborhood to get to know the people that
Speaker 1: own them, the local vegetable market seller or your local
Speaker 1: coffee guy or something like that. So if you had
Speaker 1: those in your wee chat already, obviously lean on that. Uh.
Speaker 1: And then you know the channel I just mentioned where
Speaker 1: a lot of these stores they maintain an online listing.
Speaker 1: They've taken all their products off of the shopping cart
Speaker 1: software except for one, and it's just a picture that
Speaker 1: says to discuss what products we have, please add my
Speaker 1: wee ch at and then they give you their phone number. Uh.
Speaker 1: So that's that's I would say, those are the three
Speaker 1: main ways where you can try to find somebody who's
Speaker 1: hustling and has some stuff to sell. What items have
Speaker 1: been hardest for you to get hold of? Um? At
Speaker 1: the beginning, it was all all essentials, and so anything
Speaker 1: non essential was really hard uh And that included everything
Speaker 1: from like dairy products besides milk uh two sweets to
Speaker 1: SODA's things like that. And then as more vendors got
Speaker 1: into the game, these all became available and you could
Speaker 1: buy them. You were you were really only limited by
Speaker 1: whether or not you could scrounge together enough people to
Speaker 1: put together a group by I mean, that's always going
Speaker 1: to be a challenge. At this point, now, I would say,
Speaker 1: almost everything that I could think of that I want
Speaker 1: to order, I can order, or I could have ordered
Speaker 1: if I could have found forty nine more people to
Speaker 1: order it with me. And maybe you know that's the
Speaker 1: limiting factor. But there's there's a vendor out there for
Speaker 1: almost everything I can imagine now at this point, So
Speaker 1: it has healed to a significant degree. So what is
Speaker 1: it what I mean, setting aside the actual like aspect
Speaker 1: of like ordering foods and other like basic necessities, can
Speaker 1: you just like walk through a little bit about like
Speaker 1: what your day to day life is like? Do you
Speaker 1: are you able to get outside? Do you have space?
Speaker 1: H is there room or to walk around? Like? What
Speaker 1: is or how? What are people doing? Right? So we've
Speaker 1: had we've had a case in our building in the
Speaker 1: last seven days, which puts us into the the highest
Speaker 1: level of of secure zone controlled zone in in theory,
Speaker 1: we're not even supposed to leave our doors, uh, to
Speaker 1: the doors to our apartments, but hours like, I think
Speaker 1: a lot of other buildings have been operating that on
Speaker 1: the Honor code as well, because I still see people
Speaker 1: going downstairs. There's nothing there's no security camera at my
Speaker 1: door anything like that. I can still go outside and
Speaker 1: go downstairs. And uh, if I spent a lot of
Speaker 1: time downstairs hanging out out in the courtyard or something,
Speaker 1: I'm sure my neighbors would have something to say about me,
Speaker 1: because we're all supposed to be staying inside our apartments,
Speaker 1: but there's no actual restriction on, you know, walking down
Speaker 1: and walking around. I'm a volunteer for receiving our delivery,
Speaker 1: so I get out a lot already. I get to
Speaker 1: breathe the fresh air, and I get to spend a
Speaker 1: lot of time outdoors. Other people, you know, they gotta
Speaker 1: walk their dogs or they just want to get some
Speaker 1: fresh air. I've seen people going out and spending some
Speaker 1: time outside. I know other apartment compounds and other apartment
Speaker 1: communities have differing levels of stringency when it comes to this,
Speaker 1: and in some places are very strict about not leaving
Speaker 1: your door at all. What's your sense of the official
Speaker 1: data that's been out there around cases and supply availability
Speaker 1: and maybe fatalities as well, versus what you've personally ex
Speaker 1: varienced and seen on the ground, Because of course, when
Speaker 1: it comes to China, there are always questions and sometimes
Speaker 1: doubts about the validity of the official data. So I'm
Speaker 1: curious how your personal experience stacks up against what's been
Speaker 1: officially reported. I think, you know, I can only speak
Speaker 1: to my own experience. Right What we've seen is cases
Speaker 1: that we knew a d per, we're in our building,
Speaker 1: we knew were ad percent, we're in our compound. They
Speaker 1: showed up, but they took some time, you know, four
Speaker 1: or five six days between when we knew that case
Speaker 1: appeared and we thought that person had been evacuated from
Speaker 1: the building and brought to a medical treatment center, and
Speaker 1: when that case appeared on the official ledger of of
Speaker 1: our neighborhood of our district or subdistrict. So right now,
Speaker 1: what I can say is, I know there's a lag
Speaker 1: between when cases appear in real life and when that
Speaker 1: individual case ends up making its way into the big
Speaker 1: numbers the official data. Certainly, at the beginning, I think
Speaker 1: based on what we had seen coming out of statistically
Speaker 1: from other locations that had on the Crown breakouts, it
Speaker 1: looks like we were looked like we were seeing a
Speaker 1: lot of cases with an incompatible number of severe critical
Speaker 1: cases and mortality. I would say in the last you know,
Speaker 1: I haven't been checking the numbers every single day, but
Speaker 1: certainly I know in the last few days those numbers,
Speaker 1: unfortunately have been have been rising. And will they end
Speaker 1: up you know, somewhat statistically, uh, matching to what we've
Speaker 1: seen from other locations, I don't know, but certainly I
Speaker 1: think there's been a lag between what we see and
Speaker 1: what we observe and when it, you know, eventually shows
Speaker 1: up in the data. So I mean, bigger picture, I
Speaker 1: think that in the US observing um, what's going on
Speaker 1: in Shanghai, I would say the overwhelming perception is sort
Speaker 1: of incredulity, Like I feel like people just don't get
Speaker 1: it or they don't believe it, and they like, what
Speaker 1: am I missing? Because none of this makes any sense.
Speaker 1: This is so economically damaging, it would appear it's so
Speaker 1: psychologically damaging, it's socially damaging. It seems medically implausible, given
Speaker 1: the virility of some of the latest variants, to even
Speaker 1: have a COVID zero policy. I think people are just
Speaker 1: like scratching their heads. They don't have strong opinions per se.
Speaker 1: They're just really baffled. So what would you say, like,
Speaker 1: how do you perceive like the goal here, the strategy
Speaker 1: and sort of like what what victory looks like or
Speaker 1: what the process looks like? How would you describe it
Speaker 1: to someone? Oh? I mean, I think the the image
Speaker 1: of what victory looks like in an ideal world is
Speaker 1: pretty clear. It's it's something like what Shenjin did last month. Right,
Speaker 1: You have a few cases, they pop up, You locked
Speaker 1: down tighter than a clam, You have excellent local logistics
Speaker 1: and apparently pretty strong local government support. Everybody puts in
Speaker 1: their time, and then you re emerge with your case
Speaker 1: load almost our adicated. And you know, I know the
Speaker 1: folks in Shenjen are still having you know, a pretty
Speaker 1: hefty testing requirement. They're testing every two or three days
Speaker 1: to make sure they maintain that. But I imagine that's
Speaker 1: like the platonic ideal for how Chinese city pursuing it's
Speaker 1: its current uh COVID policy emerges from a localized municipal
Speaker 1: COVID outbreak. Now people are going to be analyzing to
Speaker 1: death whether or not Shanghai couldn't do it because of
Speaker 1: local government or because they moved too late, or because
Speaker 1: they were too liberal or whatever it is. Uh. You know,
Speaker 1: it's clear that shen Jen was the golden standard, and
Speaker 1: Shanghai has very has missed that by a long shot.
Speaker 1: So you can understand the desire to achieve something like
Speaker 1: shen Jen. Once it's apparent that the you know, the
Speaker 1: window has closed and the barn door is open and
Speaker 1: the horses run away or whatever metaphor you want to use,
Speaker 1: then the question is, okay, is it is it a
Speaker 1: reasonable ask to try to get back to what Shenjen achieved?
Speaker 1: Opportunity cost? What are we looking at now? Hey, I'm
Speaker 1: not an epidemiologist or a biologist or a public health expert,
Speaker 1: so I don't have strong opinions on what will or
Speaker 1: won't work. I think I do understand what they're hoping for,
Speaker 1: and I think it made sense when you were considering
Speaker 1: a Shenjen like scenario. Now that we're in the scenario
Speaker 1: that Shanghai is in, I don't know what they're supposed
Speaker 1: to do. I certainly hope somebody with a lot of
Speaker 1: expertise in that field is considering the different, uh the
Speaker 1: different results we've seen so far from Shanghai, and and
Speaker 1: wondering is is a course correction necessary? Does it have
Speaker 1: to be repeated to every other Chinese city that has
Speaker 1: an omnicon breakout after this, or is this a Shanghai
Speaker 1: specific policy. I don't know, but I certainly hope somebody
Speaker 1: is thinking about it. What's your sense of the sort
Speaker 1: of broad mood in Shanghai at the moment and support
Speaker 1: for these policies, because, again to Joe's point, if you
Speaker 1: talk to people in the US or in Europe, maybe
Speaker 1: they hear about these very strict lockdowns and they don't
Speaker 1: really get it. They're sort of incredulous about all of it.
Speaker 1: But on the other hand, in China, she President Shi
Speaker 1: Jinping has been very careful about pitching this as a
Speaker 1: way to save lives and saying explicitly that they're doing
Speaker 1: this in a way that's different to what the West
Speaker 1: has done, where they're willing to accept fatalities in exchange
Speaker 1: for you know, less harsh lockdowns and more individual freedoms.
Speaker 1: So how how do you see that portion of it
Speaker 1: at the moment? What's the mood? Like? Yeah? I mean,
Speaker 1: and again, if you if you do it as effectively
Speaker 1: and efficiently as Shenjen did, you have all nothing but takers.
Speaker 1: Everybody gets that social contract, they say, we give up
Speaker 1: our freedoms for a week or two, we get to
Speaker 1: squash everything, and then we go back to a fairly
Speaker 1: high quality life like what we had before. Certainly when
Speaker 1: this drags on the way it has for for Shanghai. Uh,
Speaker 1: what I've been seeing and hearing is that even people
Speaker 1: who are generally I would say pretty supportive of China's
Speaker 1: COVID policy over the last two years are saying, well,
Speaker 1: is Shanghai an exception? If Shanghai is an exception, how
Speaker 1: can we make it the only exception? Because people are
Speaker 1: bummed out here. I think I think that's fair to
Speaker 1: say that the people in Shanghai are are low energy
Speaker 1: they're still they understand the the intent, and they're still
Speaker 1: supportive of the intent. But increasingly, I feel, at least
Speaker 1: from the people around me, the people I see in
Speaker 1: my building we chat group, things like that people are
Speaker 1: losing I don't want to say losing enthusiasm for the
Speaker 1: overall cause, because I think people don't really think like that.
Speaker 1: I think there's and I'm just going to go on
Speaker 1: a ramble tangent here, but I don't think that the
Speaker 1: people in the midst of a of a lockdown are
Speaker 1: really the ones analyzing this by saying, ah, should China
Speaker 1: change its policy on zero COVID now, giving even what
Speaker 1: I'm going through. No, they're just saying I'm sick of
Speaker 1: testing all the time, and I'm sick of being confined
Speaker 1: to my home. And if you told me zero COVID
Speaker 1: means we get to do it like Shenjen, I love
Speaker 1: zero COVID, and if you told me zero COVID means this.
Speaker 1: I don't know how I feel about this, but I
Speaker 1: I don't think people are necessarily processing it as like, uh, oh, yeah,
Speaker 1: we've got to change the way we think about this now.
Speaker 1: I think most people are just thinking about it on
Speaker 1: a daily life basis, and I would say, yeah, they're
Speaker 1: they're sick of it, they're sick of being inside, they're
Speaker 1: sick of whatever this is. And if you want to
Speaker 1: rebrand it, if you want to call it something else,
Speaker 1: if you want to say this is dynamic zero COVID
Speaker 1: or now this is uh some version of living with it,
Speaker 1: but we're still trying to get back to zero. However
Speaker 1: you brand it, just like, make this better, make my
Speaker 1: life right now better, and then we can talk about
Speaker 1: how you label it, David, what are people doing who
Speaker 1: don't have jobs that can be done on a computer.
Speaker 1: I've got to imagine they're surviving on the largess of
Speaker 1: their employers if possible. If not, then they might be
Speaker 1: cutting into their savings. I mean, I'm a pretty white
Speaker 1: collar guy, and most of the people I know are
Speaker 1: white collar too, so we're all working from home. I
Speaker 1: know shen Jin had some pretty strict policies back in
Speaker 1: when I was there about whether or not employers were
Speaker 1: allowed to dismiss their employees because they weren't working, and
Speaker 1: what kind of protections were in place for them. And
Speaker 1: I haven't seen or heard anything about whether there's something
Speaker 1: equivalent right now, and so David, we would be remiss
Speaker 1: if we had you on and if we didn't talk
Speaker 1: a little bit about electricity in China as well, because
Speaker 1: this is your day to day job. Speaking of jobs,
Speaker 1: I want to ask what's your sense of what's happening
Speaker 1: with Chinese infrastructure spending at the moment um. And I
Speaker 1: know you're very interested in renewables, but we did have
Speaker 1: GDP figures released relatively recently showing a slowdown in growth,
Speaker 1: which is something you might expect going into lockdown, although
Speaker 1: the figures actually didn't take that most recent period into account.
Speaker 1: But do you feel like there's a big wave of
Speaker 1: fresh infrastructure spending coming to try to offset some of
Speaker 1: these lockdowns or is it basically impossible to do these
Speaker 1: projects given the current situation. Well, I'll say if we
Speaker 1: talk about offsetting sluggish GDP growth with big infrastructure projects,
Speaker 1: that gets into macroeconomic questions and I tend to avoid
Speaker 1: those because I think that's black magic. But I will
Speaker 1: say from an individual microeconomic perspective, there's massive demand for
Speaker 1: renewable electricity in a government plans for capacity of of
Speaker 1: power and that it has to be green power. Renewable
Speaker 1: power are are staggering, and that that the cart would
Speaker 1: pull the horse in that sense where we would say
Speaker 1: we need to pull up GDP figures. So we're going
Speaker 1: to increase infrastructure spending. I don't know if that's the
Speaker 1: right way i'd think about it. I think of it
Speaker 1: in terms of we are definitely going to build a
Speaker 1: lot of green energy, a lot of infrastructure associated green
Speaker 1: energy because we want it, because we need it, and
Speaker 1: then maybe that becomes a thing that actually props up
Speaker 1: g d P, but not necessarily know the other direction
Speaker 1: the on the microeconomic level, so many international corporations and
Speaker 1: grid companies and state owned enterprises, everybody has these mandates
Speaker 1: to consume a ton of renewable electricity, and all of
Speaker 1: the grid infrastructure and all the power plants and everything
Speaker 1: that goes into making those individual microeconomic needs achievable and
Speaker 1: meatable means building a lot of stuff. So I guess
Speaker 1: if you look at it from that perspective, yeah, sure,
Speaker 1: a lot of infrastructure spending coming in to be able
Speaker 1: to meet the green development goals is uh just you know,
Speaker 1: in terms of total energy demand this sort of acute moment,
Speaker 1: I mean, we've seen global oil prices um well, they're
Speaker 1: still very high, but they've come down from recent highs.
Speaker 1: In part, it would seem very likely because of this
Speaker 1: collapse of Chinese demand for gasoline and other petroleum products Shaw,
Speaker 1: so many people are stuck inside their homes. Like what
Speaker 1: do you view as uh, the sort of the sort
Speaker 1: of that the size of the current shock to energy
Speaker 1: demand from these changing consumption patterns and just changing patterns
Speaker 1: while the lockdown is happening. Well, certainly if the lockdown
Speaker 1: right now is just Shanghai, So Shanghai has twenty five
Speaker 1: million people, which is actually just a drop in the
Speaker 1: bucket for China if you see, and there's a couple
Speaker 1: other places that are under lockdown, but most of the
Speaker 1: country is is business as usual right now. So we're
Speaker 1: for seeing reduced energy demand. It's probably more macro economic stuff, uh,
Speaker 1: more long term macroeconomic stuff. There might be uh kind
Speaker 1: of domestic consumption instability or domestic consumption kind of uncertainty
Speaker 1: that would lead to us a bit of a slowdown.
Speaker 1: But you know, Shanghai individually, I don't think is it's
Speaker 1: going to be driving that we're gonna have to leave
Speaker 1: it there. I hope that things start to improve for
Speaker 1: for you and your neighbors relatively soon. But thank you
Speaker 1: so much for coming on all thoughts and walking us
Speaker 1: through everything that's been going on in Shanghai. Really appreciate it. Yeah, sure,
Speaker 1: thanks for having me, so, Joe. One thing I was
Speaker 1: thinking about through all of the was how impossible it
Speaker 1: would be to do this in the US, not just
Speaker 1: because I think people would sort of intuitively revolt against it,
Speaker 1: but also because I don't really think we have the
Speaker 1: technology or the platforms to arrange things like this. Certainly,
Speaker 1: like imagine, well, I guess you could Venmo payments, but
Speaker 1: it just seems like it would be a massive hassle.
Speaker 1: Now the software wouldn't exist for like the group purchasing
Speaker 1: or group shopping cards. And I remember, of course, you know,
Speaker 1: one of the first conversations we had over two years
Speaker 1: ago with with Dan Wong and some of the other
Speaker 1: technologies that David was just talking about, like you know,
Speaker 1: the idea of like issuing people a different colored basically
Speaker 1: passport or a different type of license to be out.
Speaker 1: You know, we would never have the sort of like
Speaker 1: agility on a sort of like government or neighborhood level
Speaker 1: to like issue something like that. So fast and have
Speaker 1: people check it for better or worse. Um. I think
Speaker 1: most people in the US are probably happy that the
Speaker 1: government can't quickly like issue all kinds of different passports
Speaker 1: to people for their neighborhoods. But yeah, there's sort of
Speaker 1: like a degree of like tech that would make something
Speaker 1: equivalent almost impossible to imagine in the US. Yeah. And
Speaker 1: the other thing that I found interesting was the speed
Speaker 1: with which it seems like businesses have actually adapted. And
Speaker 1: you mentioned that you saw that here in New York. Um,
Speaker 1: I guess I never really saw it in Hong Kong
Speaker 1: because we didn't have a hard lockdown. But it was
Speaker 1: interesting David's description of like the local coffee shop that
Speaker 1: is now a bulk supplier of coffee beans. Well, I
Speaker 1: was in Texas for a while during that spring, and
Speaker 1: like the local uh text mex place, they would like
Speaker 1: sell these kits where instead of like ordering enchiladas, you
Speaker 1: would get this big tray of like beans and chicken
Speaker 1: and tortillas to make her own enchiladas. And I thought
Speaker 1: that was great. I was like, oh, maybe they should
Speaker 1: be they should all maybe this is how it should stay,
Speaker 1: Like all the restaurants become like milk companies. Yeah, this
Speaker 1: is the other thing. I'm wondering how much of the
Speaker 1: group buying dynamics stays even if lockdown is sort of
Speaker 1: you know, if it goes away, because as I said
Speaker 1: in the intro, group buying has existed in China for
Speaker 1: a while, and people usually use it to try to
Speaker 1: get good deals on book buying or just try to
Speaker 1: secure something that's that's difficult to import without enough people
Speaker 1: demanding it. I wonder if if it becomes even more
Speaker 1: of a thing not specifically related to this, but it's
Speaker 1: sort of I forgot that in China, a city of
Speaker 1: twenty five million people, even though it's but you know,
Speaker 1: the most important city economically, is also kind of a
Speaker 1: drop in the bucket. You know. You think it's like, oh,
Speaker 1: there's this huge hand. Yeah, it's really big. But on
Speaker 1: the other hand, China is just so enormous that from
Speaker 1: the grand scale of like Chinese good consumption or energy consumption,
Speaker 1: it's not like it's not you know, it's not a
Speaker 1: gigantic share, which China is just on a different scale
Speaker 1: to everything else. However, what I would say is there
Speaker 1: have been a lot of anecdotes about smaller villages in
Speaker 1: the countryside being locked down completely. Um, there's someone I
Speaker 1: follow close to Harbin who said the entire village was
Speaker 1: basically carted off to quarantine. Now there's this talk about
Speaker 1: Beijing going into lockdown as well, and so you know,
Speaker 1: there's a lot going on. China is a big country,
Speaker 1: but it does seem like there's the potential for this
Speaker 1: to be a very significant economic hit. Yeah, really really extraordinary.
Speaker 1: And I just can't imagine, I mean, having kids, having pets,
Speaker 1: as you mentioned, I just the fact that you know,
Speaker 1: people are sort of it stretched me as a very
Speaker 1: psychologically taxing situation, setting aside even uh, concerns about being
Speaker 1: able to get food in such Yeah, absolutely, all right,
Speaker 1: shall we leave it there. Let's leave it there. This
Speaker 1: has been another episode of the All Thoughts podcast. I'm
Speaker 1: Tracy Alloway. You can follow me on Twitter at Tracy
Speaker 1: Alloway and I'm Joe Wisn't Though. You can follow me
Speaker 1: on Twitter at the Stalwart. Follow our guest David Fishman
Speaker 1: on Twitter. He's at Pretentious What. Follow our producer Carmen Rodriguez,
Speaker 1: She's at Carmen Arman. Follow the Bloomberg head of podcast,
Speaker 1: Francesco Leavi at Francesco Today, and check out all of
Speaker 1: our podcasts at Bloomberg under the handle at podcasts. Thanks
Speaker 1: for listening.