How to manage China anxiety | Following the yuan

China has often been portrayed as ‘the other’ — weird and scary, partially thanks to its own censorship rules. This sentiment turns any negative story into part of a larger cloud of anxiety.

As a functioning adult diagnosed with generalized anxiety disorder later in life, the diagnosis itself was immensely helpful. It allowed me to understand my tendency to ruminate on the past and worry about the future.

Over the past year, as I transitioned from a full-time journalist to a consultancy founder, I noticed a similar pattern among overseas brands in China. They ruminate on China’s 'glorious' past, from 2001 (China joining the WTO) to 2019 (pre-Covid), and worry about the future as economic growth stagnates and high-growth industries falter.

Over the past few months, I've been frequently asked about China's youth unemployment rate, which peaked around 21% last June before Beijing decided to mask it, China vs. India's economic growth (with Bloomberg predicting India might surpass China as the world’s growth driver by 2028 if everything goes right), and, will China really launch a war on Taiwan?

From a business perspective, any risk is a business risk that can be evaluated and navigated. However, China has often been portrayed as ‘the other’ — weird and scary, partially thanks to its own censorship rules. This sentiment turns any negative story into part of a larger cloud of anxiety.

A lot of overseas companies are distracted by China-related anxiety, so they decide to wait and see, or explore options in other markets. However, the more distracted you are, they more wait-and-see attitude you have, the more room you are yielding to the domestic competition. 

China has always had its problems, even during the period where it saw rapid growth. Ongoing problems include but are not limited to: the lack of press and creative freedom, labor rights, clashes between a Han leadership and ethnic minorities, enforcement of one central policy regardless of regional and individual differences. And its people and local businesses have weathered these challenges.

During China’s gilded age, much the world overlooked these problems, similar to how fast-fashion shoppers overlook issues behind Shein and Temu in a recent Saturday Night Live skit. Now, the problems are magnified with a more closed-up China, becoming the sole focus.

For business leaders, I want to share three tips that helped me manage my anxiety, which may help if you find ourself worried about China:

1. Don’t just make assumptions; test them. Just as acting on small tasks beats procrastination, making progress on finding answers can reduce China anxiety. Your plummeting sales may have a lot to do with waning consumer spending, sure, that’s an easy answer, but what if your physical retail channels are also not optimized?

2. Keep your eyes on the prize. Local competitors continuously innovate, adapting to macro and micro-level changes. You can argue that their success is owing to the rising patriotism, but they are also keeping their eyes on the prize, talking directly to users and reacting to trends faster than you.

3. Prepare for your worst case scenario and make evidence-based predictions. This is a typical cognitive behavior therapy (CBT) technique — think about the worst case scenario for your business, and then think: can you cope? Are there alternatives to what may happen?

I often criticize China’s lack of press and creative freedom and hope for a more liberal, progressive future. Yet, I can’t deny China’s meteoric economic rise and how that’s shaped the hyper-competitive consumer market, sometimes, we forgot how far China has gone.

For example, I’ve written about how there are anti-aging dog foods now, but around three decades ago, pets were banned by Chairman Mao Zedong due to concerns about rabies and his belief of keeping dogs as bourgeois. When I wrote about the lack of safety in sports and fitness, I’m also aware that sports like skiing and climbing only become accessible and popular in recent years with the development of related facilities.

There will always be opportunities in this market if you stay focused on your target audience, and navigate risks as you go. And I hope that my anxiety management tips can be helpful one way or another. 🔚

Some more content I enjoyed about anxiety: Morra Aarons-Mele’s The Anxious Achiever podcast; The Atlantic’s National Editor Scott Stossel’s book My Age of Anxiety

[Header image: Hermès Chinese New Year campaign]

---

Hi, I’m Yaling. I believe that aside from the politically charged news headlines and data, a business and finance audience could also benefit from being in the loop for consumer trends and human-centered stories.

I write the newsletter to cover exactly that, while providing research and strategy services for brands and financial institutions through my consultancy ApertureChina.