E82: All-In Summit: Claire Cormier Thielke on China + Q&A with Flexport's Ryan Petersen

We're really excited to have Claire with us. Come on out, Claire. Are you here? All right. What are we... Welcome, Claire. What will we be talking about today? We're going to be talking about China, you know, just as everything has been all spicy. Yeah, well, just again, we're trying to make today about just easy breezy topics that, you know, the most easiest things to manage.

So we... Armaments, Ukraine. Let's go to China. Sure. Please welcome Claire. Perfect. We are going to actually keep this pretty apolitical today and maybe talk a bit about the parts about China that are less discussed. In the headlines. And, you know, Jason reached out and he said he wanted to really understand what were some problems and I wanted to see solved, that we wanted to see solved.

So I'm a property developer. I run Greater China for Heinz. We're the largest private real estate firm in the world. And we have an incredible Greater China team. I know I see these folks in the front. They're like, where is she? I can't possibly spot her in there. So we have a team that is working across Beijing, Shanghai, Shenzhen, Dongguan, and Hong Kong.

And we get to work really across the real estate spectrum. So we built the greenest skyscraper in China. We built some of the first international service departments in the country and are doing some really interesting innovative projects. Like in Hong Kong, we bought a distressed hotel that we're turning into really a new kind of living, collaborative living that's super technology enabled for a young population there where the average white collar young person, it takes them 20 years of salary to be able to buy an apartment.

So we get to approach these problems that are not unique to our part of the world, but often the solution is a combination of East meets West. So back to kind of what's the problem. Well, you know, we're sitting right now in Miami, a place that is super exciting, thanks to a lot of the things that are happening right here that have been hyped by a pretty awesome mayor, right?

What did he do? He got on Twitter and he talked to all of us about what this city had to offer. It had key ingredients. It had universities. It had an upward trajectory. It had young people looking to collaborate. And at the end of the day, that's where we want to be, right?

We want to be sitting together. We want to be in awesome spaces like this, exchanging ideas with other interesting people. That's how you do cool stuff. And so as property developers, we think, you know, how do you create spaces where people want to be their best, right? Collaborate with others and build a better future.

So that's a lot of jargon, but what does that actually mean? Back to the problem. Well, first, these ingredients are pretty clear. I teach a class at Stanford on this called Who Owns You? Who Owns Your City? And the students usually pick it up in the first 10 minutes.

It's a place that has pretty good infrastructure. Can I get a job? Can I afford to live here? And is there cool cultural stuff that keeps it from being too bland? But then, you know, you'd say, okay, well, cities can learn from each other, right? You can just take those ingredients and apply it.

And that's what Suarez did a great job of here. But we are living in a time where the East and West have never been more divided. Right? And building a city, building buildings is really hard. It's like the most extreme version of hardware. So as a property developer, we spend our time really thinking about what are the big macro trends, what are startups focused on, where do they want to be?

Because our spaces need to be relevant for 50, 70, 100 years, and we can't pick up our building and move it somewhere else. And so you try to take the arbitrage of what's working in one part of the world and try to apply that to another and solve problems.

And that's where you find great returns, but it's also where you build places that are going to be relevant for folks. And so, you know, just a couple examples up here behind me. So, you know, we talked about the living challenges, so for folks to be able to afford a place to buy.

But the concept of rental apartments, so like multi-family, if anyone lives in a multi-family building with one landlord, that isn't totally a thing in Greater China. Often people are left to rent from an individual landlord, pay a deposit that's enormous, cost prohibitive and get, you know, quality of product that really is not up to what they would expect.

And so taking a very, in some ways, kind of Western concept and applying it in a place that Texas is not a place for. So, you know, we're talking about a lot of things that are going to be a little bit more complicated than we are. But I think that's where we're going to be.

And so, you know, we're going to be talking about a lot of things that are going to be a little bit more complicated than we are. But I think that's where we're going to be. And so, you know, we're going to be talking about a lot of things that are going to be a little bit more complicated than we are.

But I think that's where we're going to be talking about a lot of things that are going to be a little bit more complicated than we are. And so how do you combine those things together to create something that doesn't exist? You see up behind me a logistics building, but it's actually six stories high.

Something we're developing that is a giant, almost like a refrigerator, but a high rise, super tech enabled. And that's because, you know, they've got a lot of people. That building will be sitting within a 45 minute driving radius to 45 million people. And it only has a quarter of the cold storage capacity per capita that the US does.

Okay, it doesn't take a genius to see that this trajectory is, you know, lower left to upper right. And so again, you're taking this concept of East meets West. Building up here, just behind me is in Shanghai. It's about a million foot tower. You have a lot of those here in the United States, big fancy office buildings, you know, where people used to go to sit at their computers and do work.

But this one is very different from one that you may have walked into earlier this week. This entire building is on WeChat. You can interact with the building on WeChat. You can interact with the landlord. You can interact with your other tenants. You can have chance encounters or organize a yoga trip in the afternoon with the people, with the space, using this digital interface.

It's really combining the way we live right now. We live in a physical world, but so much of our idea sharing, our collaboration is happening in the air, right? In a digital experience that we can't see. And so it's another combination of this East meets West. And so what becomes a problem and an opportunity, a problem, when you sit in the middle of this world, like my team has the honor to do, is you see that there are all of these opportunities for us to be able to share this.

Really the best of what the West has to offer with the innovation that's happening on the ground in China. But it is so hard to talk about in this very divided world. And so we like to take the positive side and say, you know, we're living in this world of like magic and Larry.

And how can we make each other better? So I thought I'd use just a few minutes and then we'll hang out with the besties to maybe share a story that maybe you all haven't read so much about so that you get the benefit of knowing a little bit about what's happening over there.

And you can see an example of where sort of East meets West and that collaboration can make us all better. So up here is a gentleman you all will probably recognize. This is Deng Xiaoping, famous for really the opening up of China. And he was an experimenter. You know, he had this vision of what China could be.

And he saw what the importance of the physical world, the physical infrastructure, what a role that could play to enable the economy to jump further. And so the picture to the other side is Shenzhen, which in 1980 was barely a fishing village. It had about 58,000 people, very few paved roads.

And Deng Xiaoping, he was from Sichuan, so he really understood what it was like to not be from the big city. And so he declared it a special economic zone, special economic zone. So Jingji Zheqi. And that meant that it would be this place to experiment with bits of capitalism, free trade, etc.

So what is it today? Well, first, there's that same road along progression just a few years after it was declared a zone. And then up here behind me is what it looks like now. It's over 12 million people. The average age is 29. It's really the tech hub of China.

So companies like DJI, which makes 70% of the world's drones, they call this area home. And just within this area, if you were to go shortly from where this picture is taken, you'll have two of the world's five biggest ports by tonnage. So how do you take that head start and turn it into something further?

Well, they took a lesson out of the book of the West. And they created something called the Greater Bay Area. It's like the...yeah, okay, you guys get it. And so what is the Greater Bay Area? Well, it is a collection of nine cities on the mainland side, some of which may be familiar to you guys.

So Shenzhen, as mentioned, and Guangzhou. Guangzhou is about 18 million people. Places like Zhuhai. Do you all remember, you know, several years ago, there was this thing about China building the longest bridge in the world. And everyone's like, "Where is that?" Okay, it was in Zhuhai. And then, so nine cities on the China side, and then Hong Kong and Macau.

And together, this area, it's about the size of, called West Virginia, today has a GDP that's sitting right around Canada and South Korea. Okay, about 1.7 trillion. In 2017, they declared this Greater Bay Area name. And it was there to really back up a lot of the investment, frankly, that had already started to join these cities together to create a super region.

So within that super region, they spent about 300 billion to build infrastructure to further connect it. So within just four years, they built 2,000 miles of speed rail. Like high-speed trains. Here we have like a little, you know, one from here that goes to Fort Lauderdale. You know, Texas is going to get one in the year 2090.

And so, so what does that mean? That means that I can walk out of my office with my teammates in Hong Kong, which is right next to that big Ferris wheel thing that everybody recognizes. I can take one stop onto Metro in 13 minutes on a speed train. I could be in Shenzhen.

Or I could keep on going and I could access about 23,000 miles of high-speed trains and get to Beijing, get to, you know, further than Guangzhou, get to Western China. It is amazing and it is happening so quickly. And that number will soon be 40,000 as they continue to build.

But it's not just speed trains. These are interconnected nodes with further Metro, right? With transit-oriented development on top of the meetings of these trains. So back to the so what. So we know that if you take cool people and put them in cool places and you give them an opportunity to interact, well, what can you do?

So this area, again, the size of West Virginia now with 70 million people who are all quite young, and again, back to the ingredients, we talked about what sort of fosters innovation. Well, they've incentivized universities to put additional campuses here. And these are the best universities in China. So Tsinghua, Fudan, et cetera.

They funded further life science. They funded further tax increment zones to encourage businesses to come and set up nodes of activity and to be focused on areas of excellence. So remember we talked earlier about in 1980, there were 58,000 people in all of Shenzhen. So just between 2010 and 2020, in one small neighborhood on the western side of Shenzhen, they filed 58,000 patents.

It's pretty amazing. And that shouldn't be scary. That should be exciting, guys. This is where we get innovation. This is how we get better. Back to the magic and Larry, right? Thank you. Yes, you can clap for that. You can clap for that. So what does that mean for us?

What does that mean for folks who are sort of getting to work in this interstitial space in between getting to live within it? Up here behind me, I have -- I'll clear the visual for you. It's further just connecting, showing these metro lanes, these trams, buses, et cetera, leading to these speed trains.

Back down here, that's Hong Kong Island. And then this takes you through a bit of the Bay Area before you get out to the rest of China. Well, why does it matter? It's because these things layer together. Okay? So China's e-commerce percentage is about 25% of their overall retail.

Here it's about 14%. Again, y'all are smart. We can see where this is going. So you can take some notes on the preview and see what things and trends may be coming here. In China, about 85-ish percent of their transactions are mobile. Here that's barely 30%. Where is that going?

How does that work? And you can see what's happening. Another is you can look at trends that are just part of the world there that have been happening for a long time. And you can see what's happening in the world there that haven't made it here. And you sit there and you're like, "Wow, what a chance to iterate." So the example there, again, we'll stick with shopping and retail, is social shopping.

So this idea of streaming while shopping that's layered with a full experience and imagine what it can do. And again, if you layer that on top of this WeChat platform we were just talking about, a place where I can go and I could make a new friend right now.

And I can introduce you by looking at you, showing my phone to you, putting them together so we can introduce a product, introduce a lecture, a concept together. Imagine what we can do. Elon likes WeChat. He was just talking about it yesterday. So the point is that we all have this opportunity to really, you know, again, the headlines can be exciting.

They can be crispy. But to look beneath them. And to take an opportunity to further connect with the people. Because, again, those folks who are hopping on these trains for, you know, probably the equivalent of about 45 cents to get on the public transit here, going around and exchanging ideas, these people, most of them are not politicians.

Most of them are not big world global leaders. They're folks who are trying to create something for themselves. They're folks who are trying to create something for their children. To build a better world. Right? So we're really all on the same team. So with that, bring the besties out, I guess.

Try not to get too spicy. All right. Center stage for you. Right here? Right there in the middle seat. Oh, baby. Well done. Well done. Be nice, guys. Be nice. Of course. Of course. Well, Sax is in here, so of course we'll be nice. That's kind of by default.

And meet our Ryan Peterson from Flexport. Claire. Maybe you guys have Ryan, Claire, Ryan. I'm introducing you two guys. Claire, Ryan, Ryan, Claire. And then you'll switch over. Hi. You guys met? Ni hao. Ni hao. We follow each other. So what do we as Americans not understand about our rival?

And what does our rival most not understand about us in your interview? Well, I think the rival is the one who's lost in your estimation having operated in both countries for so long. You know, the term rival is an interesting one. Obviously, I love sports analogies and came from the track and field world myself.

Claire was in the Olympics, guys. Claire was injured. Claire was injured. She's like, "I used to go running sometimes." Kind of fast. At the Olympics. But, you know, your job in the sport is to find the problem. And you find the person who is better than you in some ways.

And maybe they're strong where you're weak. You're weak where they're strong. You find each other and you shore up together. And I think that is what becomes so clear when you live there, when you live on the other side of the world. But maybe we're born here or, you know, I'm a minority.

So I've maybe always lived in that interstitial space personally. Or even our team. Our team is very representative of modern China. We have people from nearly every province. They're really across the education bracket. Highly trained engineers but who might be quite young. To folks in their 60s who have really seen China evolve.

And so I do think the thing that can get missed is almost that concept like we talked about that as "rivals" they're not monoliths. Just as America is not a monolith. Right? And we can take the best of each other. So we're best of rivals in a way. There we go.

Well said. Is there a model for the century for cooperation between the two nations that's enhancing to both? Hmm. I think it's happening in enterprise. I really think it is. So when I look at, again, younger people, the products that they use or the products that the young tech entrepreneurs in China are working on versus here, they're approaching a lot of the same problems.

Right? So on the social side, looking at Douyin and what made it so catchy. Explain what it is for us. It's TikTok. It's TikTok. And back to that one about cheat codes and a preview. Douyin was popular years ago. And so I remember first looking at the app and being like, "Wow, this is very catchy." And there's effectively no difference between Douyin and TikTok.

So do you read and write Mandarin fluently as well as speak it? Well, you will never confuse me for a local. Or a local. Or a local. But enough to get by. And so when you do business in China, do you conduct it in English or do you conduct it in Mandarin?

Yeah. So with the team, we work fully across what's appropriate because we also work in Hong Kong where it's Cantonese. Right. But all of my communications that go out to my full team, everything in full team is in Mandarin. We do have a large part of our team that only functions within Mandarin.

So when you're, for example, like you showed some of these buildings and the idea that came to me is this is a massive coordination problem that's almost impossible in the United States, which is if you have this idea of like this living, breathing, monolithic building that is connected via the internet, it probably would be 50 organizations in the United States that are connected to each other.

And so I think that's a big problem. And I think that's a big problem. And I think that's a big problem. And I think that's a big problem. And I think that's a big problem. And I think that's a big problem. And I think that's a big problem. And I think that's a big problem.

And I think that's a big problem. And I think that's a big problem. And I think that's a big problem. And I think that's a big problem. And I think that's a big problem. And I think that's a big problem. And I think that's a big problem. And I think that's a big problem.

E82: All-In Summit: Claire Cormier Thielke on China + Q&A with Flexport's Ryan Petersen

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