Money advice: A tale of two Chinas

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MONEY ADVICE

In his regular money advice column Dave Deruytter asks if China has overtaken the rest of the world in digitalization.

With its booming coast and a slow hinterland, China has taken on a split personality. It is one of those countries that is developing and changing at the speed of light. If you do not visit it every other year, you are out of touch with its new realities.

Luckily, I had lunch with a young friend who has just returned from a three-year stint in China with her husband. She was very excited about her experience there and had many questions for me too. Was her impression wrong that Belgium had become poorer, people sadder and the economy stagnant over the past three years? Well, that depends on who is making the comparison. Me, living in Belgium for the past three years, or her, living in a giant, modern city on the fast developing Chinese coast.

She has always been a person full of energy before, but since she has been in China that energy pool had grown much bigger. She was talking at the speed of a race-car. I had trouble following her.

After telling me her story about expat itself there and its practicalities, she claimed that the digital payment services in Belgium or Europe are way behind the Chinese ones these days, with a smart payment offer coming from outsiders not from mainstream Chinese banks. Using a certain app linked to her credit card, she could make payments and bank transfers almost instantly. Actually she was of the opinion that China’s digital leadership position was now a fact for many retail products and services. She explained about another app by which you could order a coffee, pay and have it delivered at your GPS location within 10 minutes.

Furthermore, shops in China are proposing relevant products or services and bargains to you from the moment you enter through the door, if you agree to them checking your profile online. Shops also propose digital reduction coupons to you directly on your Smartphone. If the latter is not of interest to you personally, you can simply forward it to a friend. That way the seller is not spamming your friend, you actually are. Such services exist in some cities in the US and in Europe for sure, but coastal China is at least on their heels.

Mercantile and entrepreneurial as the Chinese are, their speed of action in business is not slowing, on the contrary. With exports dipping, the Chinese authorities are focussing on developing the internal Chinese market ever further. And, as they do not have the brake that comes with bricks and mortar structures as in good old Europe, they can move much faster.

Chinese coastal cities never sleep. You probably have more than 20 of them today that each have more than 10 million inhabitants. 20 Chinese cities are equal to or larger than Belgium in population. Imagine how efficiently you can work on those 200 million citizens with products and services through digital sales channels, apps and more. You can grow an imperium in a few months if you hire, or employ as independents, some of the vast number of eager, bright and entrepreneurial Chinese youngsters, Generation Z or young Generation Y.