How to go to China (again)

January 8, 2026

Last year, I wrote about returning to China for the first time in a decade. That piece was about rediscovering a country — the scale, the convenience, the 卷 competitiveness that defines modern Chinese life. This trip was different.

A prime example: I saw a car factory that looked like an Apple Store. Clean white walls, minimalist product displays, a gift shop nestled between showroom atriums. Except it wasn’t Apple. It was Xiaomi, a company that was making smartphones and rice cookers a few years ago. They announced their car ambitions in 2021 and delivered a production vehicle by 2024. Apple, meanwhile, spent a decade and billions of dollars on their car project before quietly killing it.

This is the story of China right now. Not just the scale or the speed, but also the quality. Things that were subpar knockoffs a decade ago are now genuine competitors — and in some cases, better than their Western counterparts. The cars. The apps. The consumer brands. The content. The AI models.

Last year’s piece was about contrasts and first impressions; this one is about what China is actually producing. The quality surprised me. In many cases, it unsettled me.

Making money is our core competence

There’s a concept popularized by the great Charlie Munger called the “circle of competence”. Roughly speaking, this refers to the knowledge you have mastered, paired with the implicit imperative to stay in your domain. Don’t assume success transfers. If you’re a genius in one domain, it’s dangerous to believe you’ll be a genius in another.

The question that I’ve always wondered about is: what constitutes a domain?

And I think the Chinese fundamentally think differently about this. As Dan Wang points out in his book Breakneck, when COVID happened, Chinese manufacturers were able to pivot factory protection immediately:

“As we sipped tea in his office after the tour, we chatted about why the United States was then mired in production difficulties… ‘Chinese companies decided that making money is their core competence, therefore they go and make masks, or whatever else the market needs.’” (46)

Take this idea, but scale it up to every conceivable consumer electronic product, and you might begin to understand Xiaomi.

When I learned we’d be visiting Xiaomi’s new EV factory in Beijing, I was thrilled. The extent to which China had electrified its transportation base shocked me. I invented a new game while there: spot all the different Chinese EV car brands. I saw BYD, Nio, Li Auto, Geely, Roewe, and so many more throughout the streets. But these were all relatively cheap starter electric cars, and the only luxury electric cars I saw were still largely Mercedes or BMW’s.

Then we got a tour of the Xiaomi factory.

The Xiaomi factory is in Yizhuang, an industrial district in southeastern Beijing. It’s a massive, sprawling complex. But what struck me wasn’t the size of the factory; it was the visitor center.

I’m no car manufacturing expert, but I never pictured car factories having visitor centers. Walking in felt eerily like entering an enormous Apple Store. It was as if Xiaomi had studied every detail of the Apple retail experience and asked: what if we did this, but for electric cars?

Some highlights:

  • Autonomous platform robots everywhere: The factory floor was dominated by small, wheeled platform robots that moved materials autonomously. Much of the factory seemed to be optimized for these robots. For example, the (human-operated) forklifts had mounted laser fixtures that demarcated bright red lines around the forklift, ostensibly an additional safety feature for the wheeled robots.

  • Extreme automation: The ratio of robots to humans was higher than I expected. Entire sections of the assembly line operated with minimal human intervention, and there were far more of the wheeled robots than humans.

  • Immaculately clean: For a factory that had already started production of vehicles, it felt more like a laboratory than a manufacturing facility. Again, perhaps it’s my car manufacturing ignorance, but this sterility was surprising to me.

What I can speak more confidently on though, is the consumer’s perspective on the car. And it’s shockingly good.

The interior felt premium — soft-touch materials, an enormous amount of technology beyond the huge infotainment system, and other thoughtful design details throughout. We had the chance to take a test ride in the top-of-the-line model of the SU7, and the 0 to 65mph in 1.98 seconds is a statistic I intellectually understood but physically was not ready for. If you blindfolded me and put me in this car, I would have guessed it was a luxury European EV, not a product from a company that was making smartphones and rice cookers a few years ago. At comparable price points, I’d pick this over a Tesla or any other EV on the market.

MKBHD — Marques Brownlee, probably the most influential tech reviewer in America — recently reviewed the Xiaomi SU7. His reaction mirrors mine, which is genuine surprise at how good the Xiaomi car is.

It’s remarkable: a Chinese smartphone company that also makes air purifiers beat the most valuable consumer electronics titan in the world to market. The “making money is our core competence” philosophy, it turns out, has its advantages.

Ironic to see that we’re going to get cooked by a company that makes rice cookers.

The TikTokization of everything

The Xiaomi story is about manufacturing competence applied to every single physical good. But there’s another class of good where China’s “making money is our core competence” philosophy has been applied with terrifying efficiency: content.

I’ve always been too scared to download TikTok. And after this trip, I’m still more scared of this “TikTokization” of everything.

Over the past couple years, I have been introduced to short-form dramas (microdramas): serialized narratives chopped into 1-3 minute vertical video episodes, specifically tailored for smartphone consumption. Think telenovelas, but optimized for the TikTok attention span, and extremely portable — now a 20 minute subway commute can be measured in seven short-drama episodes.

The format originated in China, where platforms like Hongguo (红果, ByteDance’s short drama arm) emerged from web-novel platforms that realized their IP libraries could be cheaply adapted to video. They designed a brutally efficient playbook: take a story already validated by reader engagement data, film it in two weeks with a $100K budget, chop it into 80-100 episodes with cliffhangers engineered at precise intervals, and distribute through algorithm-optimized feeds.

The content itself follows a rigid formula. There’s a hook within the first few episodes that gives viewers a reason to keep scrolling — what one producer calls the “golden three.” The genres are incredibly predictable and tap into some deep-seated human desire.

One of my favorite quotes is from the author Paulo Coelho:

“There are only four stories to tell — a love story between two people, a love story between three people, the struggle for power and the hero’s journey.”

The revision:

“There are only three stories in microdramas: revenge fantasies where the underestimated protagonist reveals hidden power, Cinderella stories with handsome billionaire CEOs, and Twilight-esque supernatural romances involving werewolves and/or vampires.” — Nick Chow

The plots are shamelessly repetitive. When I did my own deep dive for an entire short drama (for research, of course) I remember thinking that the show kept rehashing the same core conflict over and over. The entire series could probably have been condensed into a singular 10 minute scene. The drama was structured like a Russian nesting doll — you’d resolve one conflict, open it up, and discover the same conflict waiting inside. Then again. And again.

And yet, short dramas aren’t just some niche phenomenon. The Chinese government recently revealed that over 50% of internet users in China have watched a microdrama, more than have ordered food online or used a ride-hailing service. That’s a staggering number. And the format is now migrating West, with productions shooting in the UK and US using local actors to make the content feel native.

The competitive dynamics of the short drama industry are pure 卷 — the same brutal, exhausting competition I wrote about last year. All the leading global platforms trace their lineage to Chinese parent companies: ReelShort to Crazy Maple Studio (backed by China Online Literature), DramaBox to Dianzhong/StoryMatrix, ShortMax to Jiuzhou Culture, GoodShort to New Reading Era. These are entrepreneurs who looked at the cutthroat Chinese market and thought: “America seems less competitive.”

Microdrama apps are on track to generate billions in revenue outside of China. The demographics aren’t who you’d expect from a “tech” phenomenon. If you live on the coasts, you’ve probably never heard of any of this. The viewers come from the heart of the US, the same core audience that fuels the romantasy bestseller engine; the only difference is that they’re watching instead of reading, and they’re paying $30 to unlock the ending, one microtransaction at a time.

The business model borrows directly from Eastern gaming monetization. Users get 5-10 free episodes, then face micropayments of about $0.30 per episode through a coin-purchase system. The design is sophisticated. Pre-purchased coins decouple payment from consumption — once bought, spending them doesn’t trigger the pain of paying. Sunk cost kicks in after 20 episodes, and intermittent variable rewards create slot-machine psychology. It’s addiction science applied to mass-produced narrative.

The quant in me can respect the ruthless optimization here; the purist in me shudders.

I believe long-form content facilitates thinking and reflection in ways that short-form content simply cannot. Short-form lacks the depth of complexity to be genuinely thought-provoking and interesting. It’s stimulating and attention-grabbing, sure, but that’s different from being valuable.

And yet, even though I can easily articulate all my qualms with short dramas, they are still frighteningly easy to consume. That gap — between my stated preference and my revealed behavior — is why I fear this trend so much. It taps into a part of my monkey mind that I don’t like.

There’s an uncomfortable analogy here to descriptions of Chinese cooking philosophy — the “dispassionate, analytical approach” of looking at an ingredient, asking “what are its downsides and what are its potential assets?”, and then compensating for deficiencies while maximizing assets. Short-form drama is that philosophy applied to human attention. The output is something no film critic would celebrate, but it’s perfectly optimized for what it’s trying to do.

Asbestos hands

Speaking of food, let’s talk about actual food.

What follows are a series of vignettes — sensory snapshots, minor digressions, and stray observations. It’s a mid-essay refresher course of sorts.

Street food to the Bund skyline: Within two hours of landing in Shanghai, I was perched on a plastic stool outside my favorite shengjianbao chain (Xiao Yang Sheng Jian, 小杨生煎), watching the city pass by. The stools were the kind that would fail any American safety inspection: too low, too wobbly, too close to the street. A group of women finished their skewers and casually tossed the bamboo sticks into the bushes behind them. No one batted an eye.

When my order was ready, the woman behind the counter handed me a paper container. I realized too late that she had asbestos hands and the container was scalding hot. It took every ounce of my willpower to ignore the pain receptors firing in my hands, smile politely, and gently lower the container to the ground before my skin blistered. She was already serving the next customer.

A few days later, I was at a restaurant overlooking the Bund, eating delicate Shanghainese cuisine in a private dining room with panoramic views of Pudong’s skyline. The service was choreographed. The dishes arrived in courses. The lazy susan rotated automatically (more on that later). It was a completely different universe from the plastic stools and careless littering — and yet both experiences were unmistakably Shanghai.

Xiaolongbao: The price range of xiaolongbao in Shanghai spans one order of magnitude. At my favorite xiaolongbao restaurant, it was 10 RMB — about $1.40 — for a basket. We stood outside the restaurant on the sidewalk (the tiny seating area was crammed with elderly patrons) and inhaled them. A few days later, at a fancier restaurant, it was 199 RMB for eight xiaolongbao. And the 10 RMB ones were definitely better.

Spacious v. packed like sardines: One thing I noticed about eating in China: there’s no middle ground. It feels like you’re either crammed shoulder-to-shoulder with strangers at a communal table or you’re in a private room that feels hermetically sealed from the outside world. It’s either the servers brusquely asking what you want and then slinging your food at you, or it’s a coordinated team of staff unobtrusively waiting at your beck and call. The mid-tier restaurant experience that dominates American dining is conspicuously absent.

I found myself enjoying both extremes. There’s something energizing about the chaos of a crowded restaurant, the clattering of dishes, shoveling food down while other waiting customers hover over you. And there’s something magical about the private room, the heavy door that closes behind you, the sense that you’ve been transported to a parallel dimension where only your dinner companions exist.

It’s convex, and food is an experience where I like convexity.

Slow dining v. sprinting companies: The cognitive dissonance hit me during a dinner at the Skyline restaurant, 56 floors above Shanghai. We were in a private room with a panoramic view of the Bund — the historic waterfront on one side, Pudong’s futuristic towers on the other. The meal unfolded at a leisurely pace: small dishes arriving one by one, tea being refilled without asking, conversation drifting across topics without urgency.

Earlier that day, we had met an AI startup where engineers were pulling all-nighters, shipping features at a pace that would give American product managers anxiety attacks. The contrast was jarring.

How do you reconcile the slow, ritualistic pace of a Chinese business dinner with the brutal speed of the companies that surround you? I still don’t have a good answer.

Automatic lazy susan: One small innovation I became unexpectedly enamored with: the automatic lazy susan. In nicer Chinese restaurants, the lazy susan at the center of the table rotates continuously on its own, at a slow, dignified pace — maybe one full revolution every two minutes.

This solves a subtle social problem I’d never consciously registered. With a manual lazy susan, there’s an awkwardness to reaching over and spinning it to bring a dish in front of you. Spin it too often, and you seem greedy. Spin it while someone else is mid-reach, and you’ve committed a minor faux pas. The automatic rotation removes all of this. You simply wait, and the dish eventually comes to you. Patience is rewarded.

The only downside: if the rotation speed is slightly too fast, or if the item you’re targeting is slippery, you have a three-second window to execute your chopstick grab before the dish escapes. I am embarrassed to say that I missed a few times. But on balance, I’m a convert.

Most Americans have heard of Xiaohongshu by virtue of the almost-TikTok ban earlier this year. When the U.S. government prepared for a nationwide ban on TikTok in January, a wave of American TikTok refugees fled to alternative platforms. Their destination of choice was Xiaohongshu, also known as Red Note.

The numbers were staggering. On January 13, Xiaohongshu’s U.S. user base spiked by almost 3 million in a single day — climbing from fewer than 700,000 to around 3.4 million daily active users. It shot to number one on Apple’s App Store, where it stayed for multiple days.

It was part protest, part curiosity, and part genuine discovery of a platform that, for many, felt surprisingly refreshing.

Xiaohongshu is hard to describe, but the best approximation is something like Instagram meets Pinterest meets Reddit. The platform is designed as a lifestyle community where users share detailed reviews, recommendations, and experiences. Unlike Instagram, which prioritizes visual polish, Xiaohongshu emphasizes textual depth. Users write mini-essays about products they’ve tried, places they’ve visited, and restaurants they’ve eaten at. The content feels more like crowd-sourced Yelp reviews than classical IG influencing.

The search functionality is where it really diverges from Western platforms. On Instagram, you might search a hashtag like #lipstick. On Xiaohongshu, users enter specific phrases like “winter lipstick recommendation matte texture dry skin” to get hyper-tailored reviews. The vast majority of users have search behavior on the platform, and one-third go straight to searching as their first action upon opening the app. It’s less about passively scrolling a feed and more about actively researching decisions — what to buy, where to eat, what to wear, how to solve a problem.

I’d heard of Xiaohongshu before, but the scale floored me. Xiaohongshu has over 300 million monthly active users, which is basically the size of the entire U.S. population. There are more searches on Xiaohongshu than Baidu, which is China’s version of Google.

A lifestyle social media app has overtaken China’s equivalent of Google — not by competing on the same terms, but by creating a platform so compelling that users never need to leave. When Chinese consumers want to know what to buy, where to go, or how to solve a problem, they increasingly skip Baidu entirely and go straight to Xiaohongshu. The platform has become the de facto consumer internet for an entire generation.

When we visited their office in Shanghai, it was immediately obvious that this company thinks about itself differently. The space was on the top floors of a giant office building — bright, airy, filled with plants and warm wood flooring. There were open collaborative spaces with chairs and tables scattered throughout. There was even a store with Xiaohongshu merch on the floor, as if the company was dogfooding its own commerce platform. It was the most aesthetically pleasant office we visited in China, and the vibe matched the product: aspirational, community-oriented, designed to make you want to linger. And linger you will.

Xiaohongshu’s vision is becoming a “virtual city” — a place where people come to discover, explore, and connect. It’s a more positive framing than most tech company visions. But a more cynical take on what this really represents would be a walled garden.

Chinese internet giants — Tencent, ByteDance, Alibaba, and now Xiaohongshu — all operate their own closed ecosystems. Traditional search engines like Baidu are struggling precisely because these platforms have become self-contained internets. When you want to message someone, you use WeChat. When you want to buy something, you go to Tmall, Taobao, or maybe JD. When you want to research a purchase decision, you search Xiaohongshu. At no point do you need Baidu.

The strategic logic is relentless. Once a platform has a strong wedge — messaging for WeChat, short video for Douyin (i.e., TikTok), lifestyle discovery for Xiaohongshu — the playbook is to build everything else to capture more of the consumer’s time.

Even Meituan, the dominant food delivery app, now has short-form dramas in its app! A food delivery company is producing entertainment content because attention is the scarce resource, and every company is at war with every other company for it.

This dynamic is more extreme in China than in the U.S. for a specific reason: Chinese consumers generally won’t pay for software products. The cultural and psychological reasons for this could fill another essay, but the result is that Chinese consumers pay with their attention to ads instead. They’re totally fine with ad-supported app experiences that would make me apoplectic. But ads require zero-sum attention. So until someone figures out how to run advertisements concurrently with other activities, every platform will keep trying to expand into every other platform’s domain.

The logical response is to build walled gardens — keep users inside your ecosystem so you can capture all the advertising value — and then try to move into other domains with the same playbook. American openness to paying for products (along with antitrust enforcement) changes this dynamic somewhat. But I wouldn’t be surprised to see our environment evolve in China’s direction.

The economics of attention are the same everywhere. The only question is how quickly we catch up.

Pessimism and finite games

During our trip, we visited a handful of robotics companies. I’ll reserve final judgment on Chinese robotics until I’ve explored Shenzhen, but what struck me most about the robotics (and AI) companies we visited: Chinese entrepreneurs speak far more practically than their US counterparts.

Back in 2019, Meituan founder Wang Xing famously proposed:

“This year might be the worst of the past decade, but the best of the next decade.”

At the time, this prediction sounded contrarian, but seemingly every year since, it’s proven accurate: COVID in 2020, government crackdown on entrepreneurs in 2021, US chip export controls in 2022, youth unemployment so bad they stopped publishing the numbers in 2023, foreign capital fleeing in 2024, Trump tariffs in 2025…

Things will get worse. Plan accordingly.

This mindset greatly shapes how Chinese entrepreneurs operate. If you genuinely believe the future holds less opportunity than the present, you pursue immediate certainty rather than long-term vision. You prefer low-risk, high-certainty projects. You focus on what can ship and generate revenue now, not what might transform the world in a decade.

There’s a game theory lens that I find compelling: American markets operate as infinite games — if you fail, you get another chance. Bankruptcy isn’t shameful; it’s a learning experience. VCs love second-time founders who’ve already made their mistakes (perhaps too much). Chinese entrepreneurs, by contrast, view their environment as finite games with permanent consequences. The stakes are different when there’s no respawn button.

This fundamental difference in outlook — what some call “definite pessimism” versus “indefinite optimism” — explains a lot about the cultural gap in how Americans and Chinese approach technology.

In Silicon Valley, there’s what can only be called a technological faith. Believing in AGI has become tribal membership. Zuckerberg’s recruiting emphasizes the AGI vision. Demis Hassabis and Dario Amodei treat superintelligence with religious fervor. The underlying assumption is that technology is an autonomous evolutionary force, and the job of the entrepreneur is to accelerate that destiny of transcendence.

In China, few people seem to genuinely believe in AGI. Most are too busy shipping products — just to survive — to worry about superintelligence.

Taking a step back, it could also be argued that Silicon Valley isn’t really AGI-pilled either — that it’s actually just a minority of very loud companies and actors who truly believe this, amplified by national media that follows the “if it bleeds, it leads” principle. The rest of the ecosystem latches onto the AGI narrative because it allows them to access cheaper capital, recruit more effectively, and ride the hype cycle. Maybe both ecosystems are equally pragmatic; the Chinese are just more honest about it.

Made in China, reconsidered

Before COVID, European cities were hiring Chinese-speaking security guards to assist the flocks of Chinese tourists descending for luxury shopping. The wealthy Chinese populace had a hunger for foreign, prestigious brands.

Now, Chinese people are shifting their consumption to national brands.

There’s a name for this phenomenon: 国潮 (guochao), translating to “national trend” or “China-chic.” It refers to the resurgence of traditional Chinese culture, aesthetics, and values in modern consumer products. What started as a niche movement has become a dominant force reshaping consumption patterns across China. About 300 million Gen Z consumers now prioritize supporting domestic brands that reflect Chinese heritage, shifting demand away from Western luxury goods.

This isn’t just patriotic sentiment — that certainly plays a role — but it’s also practical economics. Chinese domestic brands have gotten genuinely good, so the quality gap that once made Western brands worth the premium has narrowed dramatically. When you combine comparable quality with lower prices and cultural resonance, the value proposition becomes obvious. For a generation raised on China’s economic rise, there’s no longer any shame in buying domestic. If anything, it’s now a source of pride.

This mentality shift clicked for me during a meeting with a partner from one of China’s most famous investment firms. We were discussing Chinese consumer trends when the conversation turned to a surprisingly impassioned tangent about electric toothbrushes.

She had been a loyal Philips Sonicare user for years. On a whim, she tried a domestic Chinese electric toothbrush. It was significantly cheaper and the quality and features were even better. But the story didn’t end there. During a Singles’ Day promotion (China’s equivalent of Black Friday, but bigger), she bought the same toothbrush for her parents at 10x cheaper than the already-reduced price she had paid. Within minutes, everyone around the lunch table had their phones out, searching for this particular Chinese toothbrush brand. It must have been entertaining to see a group of non-Chinese investors being converted in real-time to domestic alternatives.

This trend isn’t just limited to commodity goods like toothbrushes or appliances. It’s happening in luxury too, the category where Western brands were supposed to have an unassailable advantage.

Consider Laopu Gold (老铺黄金), a Beijing-based jewelry retailer that has become the breakout star of China’s luxury market. The company was founded in 2009 with a mission to revive traditional Chinese craftsmanship, then went public in Hong Kong in June 2024. Its stock 10x’d within a year, driven by strong gross margins and surging demand for its Chinese-style gold jewelry. The vast majority of Laopu’s customer base overlaps with that of Hermes, Tiffany, Cartier, Bulgari, and other luxury brands I am hopelessly unfamiliar with. These Chinese shoppers aren’t budget shoppers trading down: they’re wealthy consumers actively choosing a domestic alternative. Even Bernard Arnault has made trips to visit Laopu Gold.

I was also surprised how many famous US/western brands have majority Chinese ownership. The list is longer than most Americans realize, just to name a few more prominent examples:

  • Arc’teryx, Salomon, Wilson — Amer Sports, owner of the three brands, was acquired by a Chinese consortium led by Anta Sports in 2019.

  • Volvo Cars — Acquired by Zhejiang Geely Holding Group from Ford in 2010. Geely also owns the London EV Company, which produces all of London’s iconic black cabs.

  • GE Appliances — Acquired by Haier Group in 2016. The “American” refrigerator in your kitchen is actually Chinese-owned, and Haier has the right to use the GE brand until 2056.

  • Motorola Mobility — Acquired by Lenovo in 2014.

  • K-Swiss — Acquired by Xtep International in 2019.

  • Segway — Acquired by Ninebot in 2015.

  • ThinkPad (IBM PC) — Acquired by Lenovo in 2005.

When you start paying attention, you realize the “Western brands vs. Chinese brands” framing is already outdated. The ownership lines blurred years ago.

Perhaps this goes back to the Chinese quality perception idea from before — the same evolution that Japan underwent decades ago. “Made in Japan” used to be synonymous with cheap knockoffs; now it signals precision and craftsmanship. “Made in China” is undergoing the same transition, just faster and at larger scale. The question isn’t whether this perception shift will happen, but how quickly it will happen.

What strikes me most is the reflexivity of it all. As Chinese consumers shift to domestic brands, domestic brands gain more resources to improve quality, which attracts more consumers, which generates more revenue, which enables more R&D. Meanwhile, Western brands lose Chinese market share, which reduces their resources for China-specific innovation, which makes them less competitive, which accelerates the shift.

The flywheel can spin in either direction. Right now, it’s spinning toward domestic.

Coda

Silicon Valley believes in technological transcendence. The assumption is that AGI is coming, that we’re building toward something beyond ourselves, and that the right move is to position for that future. It’s a kind of faith that is fundamentally optimistic, expansive, sometimes messianic. China operates from a different premise entirely. The future will be harder than the present. The game is finite, not infinite. So you’d better ship something that makes money now, because there might not be a later.

Americans tend to ask “what’s our core competence?” and then stay there. There’s wisdom in that, but there’s also a conservatism baked into the framing, an assumption that your identity is fixed. The Chinese approach assumes nothing is fixed. If the market wants electric cars, you make electric cars. If attention is the scarce resource, you produce content — even if you’re a food delivery company.

The collision is already happening, driven by the Chinese advance. DeepSeek matching frontier models at a fraction of the compute. Short dramas reaching audiences Hollywood never cared to cater to. Chinese EVs that European automakers are scrambling to answer. TikTok refugees flooding onto Xiaohongshu. The pragmatists and the dreamers met a while ago — and the fight is ongoing.

I don’t have a prediction for who wins. Both philosophies keep producing impressive results I didn’t expect. American companies continue to pull the future forward faster than expected; Chinese companies keep winning the present in ways that weren’t supposed to be possible. One invents new games. The other wins the games that already exist.

Or perhaps the question isn’t who wins. Maybe it’s what both sides learn from the collision, and whether anyone on either side is paying enough attention to learn from the other.

I’ll be back to China soon. I expect the surprises to keep coming.