- OK, let's unpractice

- Let's do it.

- We're diving into one of the most pressing economic questions out there today: How to get people spending again in a massive economy. But our starting point is, well, it's a little strange.

- A little strange is putting it mildly.

- They're starting with golden toilets.

- That's right, golden toilets. It sounds bizarre. But you look at how to revive consumer sentiment, on very successful mall in China seems to have an answer. And it involves some seriously over-the-top restroom design.

- We're talking about Deji Plaza in Nanjing. And these aren't just, you know, nice restrooms. They're practically art installations.

- Absolutely.

- We're talking six floors of these things: neon lights, gold fixtures, marbles everywhere. I even read a grand piano in one of them.

- A grand piano. And people actually travel, sometimes for hours, just to see them, to take a picture in a bathroom.

- And this isn't just some, you know, viral marketing gimmick. It actually works.

- It really does. Deji plaza was the highest-grossing mall in all of China last year.

- It pulled in 25 billion yuan, which is what, about 3.5 billion US dollars?

- About that, yeah. And some people think that might make it the sigle highest-grossing mall in the world.

- That one statistics is just incredible. So it tells you that for at least some people, the desire for that high-end, you know, experiential shopping is definitely there.

- It is.

- So that's our mission for this deep dive. We're going to use this wild success stroy, the golden toilets of Deji Plaza, as a way to understand this huge economic debate happening in China right now.

- The debate being: How do you fix weak consumer demand? Because we have to be clear: A place like Deji is a exception, not the rule.

- Right, it's a outlier, a huge outlier. That 3.5 billion dollars is just a bright spot in a pretty gloomy national picture. The reality is that consumer sentiment has been weak for a while. And it's getting weaker, and retail sales growth has slowed for five months straight.

- So that's the backdrop: People are nervous. They're not spending. So what's the official theory on how to fix this?

- The official line, the state theory, is the solution that is almost entirely on the supply side.

- The supply side.

- They're working from this idea that Chinese consumers actually have ton of money saved up. Economists call it high excess savings. The problem, they believe, is something called latent demand.

- latent demand. Okay, let's pause and really define that. Because it's pretty central to everything we're talking about.

- It is.

- It's essentially unfulfilled desire.

- So the gorvernment thinks people have the money. They just aren't seeing things good enough to buy. Is that is?

- That's it, exactly. The thinking is that consumers are sophisticated. They have money, but when they look at what's on the shelve, nothing is, you know, compelling enough to make them open their wallets. The supply just doesn't match their desires.

- So the fix isn't to give people more money. It's to make better stuff for them to buy.

- Precisely. They are betting that if you build it, a better product, a cooler shopping mall, the savings will just, you know, unlock itself.

- Which brings us right to the actual policies. The official plan that came out recently is almost entirely focused on this idea. On fixing what's on the shelves.

- It's a fascinating document. It reads less like economic policy and more like a national retail consultation. It's very hands-on.

- It really is. It gets into these tiny details. Like it says stores should sell more cute goods.

- Right, it actually mentions Pop Mart, the company that makes those little Labubu dolls that went viral.

- So the goal is to create more unique, high-margin, domestic products. Not just more stuff, but more interesting stuff.

- Exactly, and it's about experience too. The plan calls for more immersive, experiential shopping venues, things that attract visitors. It also wants shopping centers to be easier to get to from where people live.

- And more variety. I saw that it encourages pop-up stores and shops for fans of anime and e-sports.

- Yep, it's all about creating the perfect temptation to get people to spend.

- But why this approach? I mean, why is this state acting like a retail consultant instead of just, say, spending out checks to people?

- If we connect this to the bigger picture, it's really about the core of country's ecnomic philosophy. And that is an ironclad belief in protecting their massive manufacturing base.

- I see. So this is just about getting people to buy more things?

- Yeah, it's about getting them to buy the right things: the things made by important domestic industries.

- You've got it: the supply-side fix lets them control where the money goes. Think about that household appliance treatment program. A while back, economists pointed out, it was designed to funnel spending directly to appliance manufacturers.

- So producers first, consumer second - that's the priority.

- These latest plans, you know, the cute goods and better malls, they look like another way to avoid the really hard decisions.

- The decisions that would actually boost consumer's wallets directly.

- Exactly, measures that might mean shifting resources away from manufacturing, which is something they seem very relectant to do.

- It's like they'd rather bulid you a shiny new car than give you the cash to fix your old one, or, you know, put it in savings.

- That's a great way to put it. Now let's go back to Deji Plaza for a secound, because it does seem to support this latent demand theory.

- It does, to a point. Nanjin is a wealthy city, sure. But you have these big manufacturing hubs nearby, like Hefei, that are just an hour away by train.

- And people from there are a big part of Deji's custormer base.

- They are, they travel there specifically because they can't get that kind of luxury experience back home. So that does suggest that if you build something amazing enough, people will come and they will spend. But here is where it gets really interesting: Does Deji's success really mean the government's supply-side strategy is the right one for the whole country?

- And that is the billion-dollar question. The critics would say, "Absolutely not!"

- What's the fundamental mistake they're making, according to the cirtique?

- The core of the critique is this: They're confusing a broad, countrywide weakness in consumer demand with a simple shortcoming in supply. And that's a huge misdiagnosis.

- And who's making this argument?

- An economist named Zhu Tian from the China Europe International Buiness School. He argues pretty forcefully that this is a mistake.

- And what's his evidence?

- Well, he points out that the quality of China's domestic supply has gotten much, much better recently. I mean, you see it with success of local consumer brands. They're making great, competitive products.

- Okay, let me just process that. So if the only problem was latent demand, if the only issue was that the products were bad, then consumption should already be going up, because the products are getting better.

- Exactly. The fact that it's not, and consumption is still flat, despite better products, suggets the problem isn't what on the shelves.

- The problem is what's in the consumer's wallet. Or maybe more what's in their head.

- Yes, the problem is structural anxiety. And that's brings us to the two structral problems that are really weighing down spending.

- The first one is jobs

- Weak employment. Absolutely. An economist Wu Xiaoqiu has been very clearly on this. If people are worried about their jobs, or if you have young people really struggling to find work, which has been a big issue.

- And they're not going to be spending on cute goods or taking trips to a fancy mall.

- Of course not. They're going to hoard every penny. When your fulture fells uncertain, that money in the bank isn't for spending, it's your safety net.

- It's your only safety net.

- Precisely. And the second huge issue is a property crisis, that's hitting household wealth incredibly hard.

- And the property is just, it's a massive part of the average family's wealth there, isn't it?

- It's enormous. Historically, something like two-thirds of household wealth was tied up in housing, much more than in the US or Europe. So when that market grinds to a halt and valuations fall.

- It's not just a number on a page. It's a psychological blow.

- A huge one. You look at your biggest asset, your apartment, and it's suddenly worth much less. Even if you have cash in the bank, you feel poorer, and that feeling changes your behavior completely.

- You become risk reverse.

- Totally. Why buy a new car when your retirement nest egg just took a massive hit?

- So does that distinction make sense to you? A supply fix: new malls, better toilets is relatively easy. But tackling a structural problem like weak job growth or a collapse in property wealth, that is fundamentally harder, it's slower, and it's politically painful.

- It makes completely sense why they'd lean on the supply-side fixes. It avoids that really difficult structral rebalancing act.

- So this raises an important question: If the supply-side is the wrong approach, what does the alternative, the demand-side solution, actually look like?

- Well, accroding to Mr. Zhu, the alternative is to go big and go direct

- Means stimulus.

- A lot of stimulus. He proposed unleashing four trillion yuan in consumer stimulus to directly jump-start demand.

- Wow, so that's the real contrast: A direct injection of cash into people's pockets versus building a cool e-sports pop-up and hoping they show up.

- Golden checks versus golden toiets. It's a completely philosophical divid on where the problem lies.

- Okay, so to sum up this deep dive: The state's focus remains locked on its manufacturing base. That's priority number one.

- Right, that's leads them to these very creative supply-side solutions, everything from cute dolls to amazing bathrooms. All designs are to try and unlock these savings.

- But the economic cirtiques says: This is basically avoiding the real problem

- The deeper,more painful structural issues: weak employment and the huge hit to household weathy from the property crisis. They're trying to put a very fancy band-aid on a very serious wound.

- The sources material we looked at was pretty clear in its conclusion on this: The pressure on the economy is serious. They're broad, and it's going to take a lot more than gleaming lavatories to fix them.

- Which leaves us with a final thought for you to think about: Let's say the government's plan works, at least partly. Let's say they successfully encouraged better malls and great new domestic brands. But if the consumers, because they're still worried about their jobs and their devalued homes, just refused to spend anyway? What happens then to all those new high-qualitye businesses? Which force is actually stronger in the long run? The pull of perfect product, or the fear of a consumer who's worried about tomorrow?

- A question that just about defines the global economy right now. That was our deep dive. Thanks for tuning in.