Help Me Settle A Debate.

[kongli]

Okay Everybody, My Chinese girlfriend claims that is is 'easier' economically to live in the U.S. than it is to live in China. As evidence she says imagine if you have 2,000 RMB in China as opposed to having 2,000 U.S. Dollars in America, which would go farther? She than proceeds to list of things that are more expensive in China than the U.S. An example being a jacket, You can buy a nice jacket for $60 in the U.S. but would never be able to buy a nice jacket in China for 60 RMB.

My defense is that you cannot simply compare the two economies without factoring in the exchange rates. That if you simply deal with 'numeric units' the whole argument is completely baseless.

Anyway, I think it is pretty widely accepted that durable goods are much cheaper in the U.S. and perishable goods are more expensive compared to other countries.

What do you all think? Does she have a point or do you side with me? Help me settle this once and for all. HEHE.

Kongli

[jbradfor]

"settle a debate"? You think telling her that 20 random strangers agree with you, most or all of whom are also foreigners, will change her mind?

You have a lot to learn about relationships. [1]

I recommend dropping the subject. It's a lose-lose situation for you.

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[1] I'm not saying that all women are illogical or are bad at math. If the OP were female having the same debate with her bf I would say the same thing. All I'm saying is that some things are now worth arguing over.

[xianhua]

she says imagine if you have 2,000 RMB in China as opposed to having 2,000 U.S. Dollars

Well, if your cousin gets married, your co-worker holds his son's first birthday party, your cousin goes off to university (and has a party) and your great uncle has his funeral all in quick successsion, in Chinese terms, that's half your wad (or more) cleared out. The biggest expense for some Chinese families is the number of celebrations/rites of passage. This isn't an issue here in the UK (nor the US I suspect).

[eatfastnoodle]

you shouldn't debate your girlfriend.........

[gougou]

I don't quite see how exchange rates are relevant. Isn't she using dollars to buy jackets in the US (in USD) and RMB to buy jackets in China (in RMB)? No transaction should be influenced by exchange rates at all. After all, it seems she only wants to compare a simple living, not, say, the ease of running an import-export company.

I'd think an American with 2,000 USD is definitely better off than a Chinese with 2,000 RMB, but I'm not sure whether those two salaries would be comparable to start with. Is it just as easy getting a 2,000 USD job in America as is getting a 2,000 RMB job in China?

[renzhe]

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita

6. United States

99. People's Republic of China

I'm glad I could help. ;)

[SiMaKe]

http://en.wikipedia....PPP)_per_capita

6. United States

99. People's Republic of China

kongli,

Now you have the perfect opportunity to make some significant points with your girlfriend: you have some strong objective evident that "she is correct". Believe it or not, this is a win/win (if you play it right).

[JonBI]

From my understanding, Chinese people, and East Asian people in general even from "Tiger" economies seem to live with smaller incomes, and longer hours, even for highly skilled labor. As such, you need to, for the sake of this, subtract the costs of daily life from the perspective salary - so, for instance, if someone is making an average salary in the US, in US dollars, and you subtract expenses, and do the same for an average Chinese salary, generally, the Chinese person will be screwed in comparison.

That said, I don't know either of your education backgrounds. From my understanding, lots of relatively mediocre job candidates are able to find strong suitable jobs in China, whereas many skilled professionals from China are unable to find equal jobs in the US - the average statistic generally favors living in the US, but then again, it takes out the human factor, and both of yours, or whomever the bread winner may be's educational background and 关系.

[YuehanHao]

A loosely defined proposition of this sort will never be proven or disproven once and for all. But here's to wishing that you and your girlfriend can have fun debating it for a long, long time，

约翰好

[wushijiao]

Yeah, it's certainly easier to live in the US.

It reminds me of one time when I was watching "Boyz in the Hood" in South America. The people in the "hood" drove cars, lived in houses (別墅), and ate barbecue. Although they were poor by American standards, they were clearly not poor from a global perspective - in which many people live in desperate poverty. (Although, granted, this is just a Hollywood movie and isn't representative of real life. Although fairly serious poverty, unemployment, and homelessness still exists in the US, it can't really compare to hardcore poverty in the developing world).

Another thing to think about is that PPP numbers for China might be a bit misleading. Certainly things like the price of food seems dirt cheap by comparison, but the cost of housing, education, and quality health care can be staggeringly expensive to those who make around 1000 RMB per month.

[gato]

You and your girlfriend are arguing about different things.

You are saying that living expenses are higher in the US in ABSOLUTE terms, that it will cost more money to rent an apartment for example in the US than in China (in a similar kind of location).

She is saying that living expenses are higher in China in relative terms, that is as a percentage of an average person's income. That is true, too. If goods cost only slightly less in China, but the average person makes much less money, then certainly expenses are higher as a percentage of one's income.

[anonymoose]

Kongli, you are absolutely right about needing to factor in the exchange rate. So many people make the same mistake as your girlfriend, and I can't understand why as it really is fundamental to the whole argument.

Tell your girlfriend to compare China with Japan instead and then see what she says. 2000 Yen (the equivalent of about 150 RMB) won't even buy you a train ticket in Japan. I know I'd rather have 2000 RMB in China than 2000 Yen in Japan. Likewise $2000 in the US will get you a lot further than 2000 RMB in China.

[Hog_Man]

do goods cost only slightly less in china though? seems the basket of goods for the average family generally accounts for a similar portion of income, or even a smaller portion, but perhaps big purchases and rent are a much larger portion? only going off advertising and word-of-mouth here though, never actually tried to make any big purchases in china.

[Hog_Man]

@anonymouse: the exchange rate doesn't change the cost of living. that a train ticket in japan is more expensive in terms of rmb only matters if you were exchanging rmb for yen for whatever reason (travelling or whatever), but as gato pointed out the cost of living depends on how much things cost as a portion of income ie - how much can the average person buy.

[gato]

seems the basket of goods for the average family generally accounts for a similar portion of income, or even a smaller portion, but perhaps big purchases and rent are a much larger portion?

Can you provide your calculations?

[GreenArrow45]

rent definitely makes up a huge portion of people's income here, however, what you eat makes a big difference too. Simply buying a jar of peanut butter, jar of jelly, and loaf of bread could cost you around 40 RMB to 50 RMB (perhaps more). While this is still a bit cheaper than all those things in the US, proportionally it is a lot more expensive here.

Though, I would agree that you should look at the PPPs and, for what its worth, I would definitely prefer 2000 USD in the US to 2000 RMB in China.

[gougou]

Simply buying a jar of peanut butter, jar of jelly, and loaf of bread could cost you around 40 RMB to 50 RMB (perhaps more).

If you want to compare two local salaries, obviously you should also compare the corresponding local lifestyles. If you take import products into the equation, things are going to be very skewed.

(For the same reason, those Hewitt surveys of the most expensive cities are not a good indicator of how expensive a city is. They only indicate how expensive it would be to maintain a Western lifestyle.)

[roddy]

You can resign yourself to explaining fundamental monetary principles, or you can congratulate your girlfriend on her economic nous. I've had to make similar judgment calls with taxi drivers.

Simply buying a jar of peanut butter, jar of jelly, and loaf of bread could cost you around 40 RMB to 50 RMB (perhaps more).

But then you don't need to leave the house till all the peanut butter and jelly sandwiches are finished, thus avoiding other expenses.

[Hog_Man]

Can you provide your calculations?

haha no calculations i'm afraid, like i said i'm just going off word-of-mouth and advertising, and i could easily be wrong. but it does seem to me that the weekly grocery list is about the same or even cheaper after being adjusted for income, keeping in mind that most households don't get their produce for luxury supermarkets(in the provinces i've lived in anyway, which aren't rich ones). i should add that not being american i use australian prices as the base.

[gato]

haha no calculations i'm afraid, like i said i'm just going off word-of-mouth and advertising, and i could easily be wrong.

Ok, we can do some easy calculations. What is an average Aussie monthly salary and grocery bill, and what's the average Chinese salary and grocery bill you have in mind?