Help Me Settle A Debate.

[doraemon]

Yeah, I think 2000 dollars would get you a lot farther in the US PROVIDING you live in the large cities only. In some small cities in China, 2000 RMB can last you quite a while if you know how to spend your money carefully.

But in the big cities in China a lot of things seem to be so expensive, such as fast-food. It seems almost a luxury for some people to be able to have a meal at say, KFC in China whereas people of higher socio-economic class in the US or other western countries don't usually eat there. I remember going to Shanghai once and I was at the airport and a bottle of Evian spring water cost me 45 RMB, but probably because that's at the airport, everything costs ten times more. But I've also been to a supermarket in Beijing and buying a couple of bags full of snacks and fruit cost me over 400 RMB. Clothes and shoes, don't even get me started. Every time I go back to China and go shopping for clothes, there always seems to be a 4 digit figure on the receipt in the end. :o But I guess it depends on where you go shopping and what sort of stuff you buy. There's always the 批发市场 and other marketplaces where you can buy good and food for a tenth of those exorbitant prices.

On a different note, a lot of people in China seem to be extremely extravagant in spending money, even if they're not THAT rich. For example, my aunt in China says she spends around 2000 RMB a month on cosmetics, shoes and clothes and quite a lot on food (which she only eats half of). I thought most Chinese people are generally more frugal and thrifty but that seems to have changed quite a lot in recent times.

For those of you who live in China, are a significant portion of Chinese people like that? Or are they just the new rich who over-indulge themselves?

[gougou]

For those of you who live in China, are a significant portion of Chinese people like that? Or are they just the new rich who over-indulge themselves?

The common stereotype used to be that they would buy the most expensive car/mobile/(anything else that impresses others) they could afford, whereas they'd buy the cheapest toothpaste/washing powder/(anything else that nobody sees). I think that's still valid to a large extent.

[doraemon]

The common stereotype used to be that they would buy the most expensive car/mobile/(anything else that impresses others) they could afford, whereas they'd buy the cheapest toothpaste/washing powder/(anything else that nobody sees). I think that's still valid to a large extent.

Now that you mention it, it does seem quite true. Chinese people tend to spare no expense in order to impress/be hospitable to others, but those expenses are eked out from their much smaller budget. ;)

[anonymoose]

@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.

I didn't say anything about the cost of living. The point I was trying to make is that, without taking the exchange rate into account, the rest of the argument, including the cost of living, is meaningless.

To take 2000 units of currency A and compare it with 2000 units of currency B is meaningless unless you consider the exchange rate between A and B.

[GreenArrow45]

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

heh, true...however, if you're like me, that doesn't last you more than a couple days

[Erbse]

Your GF is right. Imagine you have kids. Would you ever want to put the burden of a Chinese public school on them? It's not about some dollars, it's about the future of your family. So always make sure you earn enough to move back to the west.

[kongli]

"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.

Well if our relationship actually hinged on the result of this debate I would say we have a lot bigger problems than just the argument. But thankfully we have what's called a 'healthy relationship' were we can bicker about things for the fun of it. I mean I am not saying I'm above holding up twenty printed responses from foreigners and saying "SEE,SEE, I TOLD YOU SO!", but I'd like to at least pretend I am. Know what I mean?

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).

Hahaha, I know this is right!

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.

Yea, ever since I went to the P.I. I can't look at pan-handlers in the U.S. without thinking "At least you have clothes and aren't making your home out of garbage", Not to say that poverty is not an issue that needs concern, but it is on a whole different level in third world countries.

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.

Yes, that is exactly my point. Seems like you need to factor purchasing power, average income, place of living, rates of exchange etc etc.

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.

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

This is one of the funniest sentences I have read in a while. Thank you!

Your GF is right. Imagine you have kids. Would you ever want to put the burden of a Chinese public school on them? It's not about some dollars, it's about the future of your family. So always make sure you earn enough to move back to the west.

ummm, I agree? But seriously we are talking strictly in economic terms. What kind of socio-political environment we want are maybe future kid(s) to grow up in is a can of worms that, god willing, I won't have to open for another few years.

I see many problems with the Chinese education system including pedagogy,political indoctrination, and omission of historical facts, but making sure that kids from all economic backgrounds get at least a decent education is something that the CCP has done remarkably well, especially considering where they were 30 years ago.

[luozhen]

China has a housing bubble. If you are in Beijing or Shanghai, housing is relatively more expensive.

How do you get 2000 RMB? In China, I believe that if you earn 2000 RMB, most of that will go to you, except maybe some taken out for pensions.

In the U.S., you will lose about 8% for SS and Medicare taxes, plus local, state and federal income taxes. So you're only going to be bringing home about $1600 or so, maybe less. You won't get the 8% back, maybe some other taxes will come back the next year in a refund.

A lot of things are cheaper in the U.S. due to much lower taxes and tariffs. I have found things in the U.S. selling for the same price or lower than in China (after adjusting for exchange rates), and not luxury items either, that were manufactured in China. The tariffs allow the domestic producer to sell at higher prices, and so the Americans can buy things made in China for less than the Chinese can in absolute cash outlay. Considering the differences in wages, that means the Americans are paying far less as a percentage of their income. Wealthy Japanese and Europeans still fly to the United States just to go shopping for a weekend because it is still possible for them to buy things in the U.S. for less money than they pay in their home country, due to the tax system (No VAT in the US).

Overall, depending on what you want to own and where you live, the U.S. is probably cheaper. You can move to a suburban/rural area and buy many mu of land, a car and some guns. Now what will that cost in China?

[anonymoose]

You can move to a suburban/rural area and buy many mu of land, a car and some guns. Now what will that cost in China?

You cannot buy guns (legally) in China. This is one freedom that I think the US has got wrong. I prefer the Chinese law.

[gato]

United States just to go shopping for a weekend because it is still possible for them to buy things in the U.S. for less money than they pay in their home country, due to the tax system (No VAT in the US).

Yes, the VAT (sales tax) does need to be take into account. Sales tax, because it is based on what you spend, taxes lower income earners at an effectively higher rate as a percentage of income. Those who earn a higher income are able to save/invest more of their earnings.

The VAT rate for most goods in China is 17%. There is a slightly reduced rate of 13% for basic necessities such as grocery items (unprepared food such as meats and vegetables).

The VAT rates in Europe range from 17-22%, though I think many European countries either provide an exemption or a much lower rate for grocery items.

The sales tax rate in the US is much lower. About four or five states do not have sales tax at all (i.e. Oregon, New Hampshire, Alaska). Those that do charge a sales tax of typically 5-8%, with an exemption for grocery items.

[GreenArrow45]

You cannot buy guns (legally) in China. This is one freedom that I think the US has got wrong. I prefer the Chinese law.

I think this freedom was initially a good thing, given that it put the average man (not really women at this point in time) on fairly even footing with government/army personnel as well as his neighbors. However, at this point in time, if there were ever reason to take up arms against the US armed forces or US gov't in general, it would be a futile thing to do. The gov't would likely just go into a police state or something of that nature, and I can tell you, Cletus Jones' shotgun doesn't hold a candle to Private Peter's assault rifle. So I'd agree, if we had became a country in 1949, it would have been a good law to implement, but, when America became a country, the law that is still in place was pretty reasonable.

Whatever the case, I don't think there's much value getting into a big discussion on America's freedoms such as this one. We don't really have much power to change it, and I think it would only frustrate people more.

The sales tax rate in the US is much lower. About four or five states do not have sales tax at all (i.e. Oregon, New Hampshire, Alaska). Those that do charge a sales tax of typically 5-8%, with an exemption for grocery items.

Although I am not arguing that taxes in the US might be lower than many other places, as to the states where there is little or no sales tax, the other taxes are more than likely higher.

Anyways, I think it valuable to note that, in the US, I don't know of anywhere that I can buy a heaping plate of fried rice or noodles (enough for 2 meals really) for a mere 5 RMB (something like 70 or 80 cents). Heck, I don't think that 5 dollars even will get you a lot of food anywhere at this point. Sure you might be able to get a meal at McD's or BK...but I at least don't find their meals to be filling or consisting of nearly as much food as the plate of fried rice/noodles here in China. I actually kept track of all my expenses for a month and food outweighed all the other things by a significant amount (I didn't include rent or utilities), so from that perspective, China could actually be cheaper. (Unless of course you're someone who buys only luxury foods, clothes regularly, and other unnecessary things, in which case China is more than likely going to be quite expensive by comparison)

[gato]

I actually kept track of all my expenses for a month and food outweighed all the other things by a significant amount (I didn't include rent or utilities), so from that perspective, China could actually be cheaper.

You are talking about absolute price. I pointed out the difference between absolute price vs. relative price earlier in the thread.

China is cheaper in terms of absolute price, but you were earning a local salary (in Taiyuan, the average monthly salary is probably around 1000 yuan), China might not feel so cheap.

[luozhen]

Just to follow up on saying that it costs more to buy the same things in China:

Products made in China often cost more there than in the West

The premium prices aren't limited to foreign-branded computers. Kobe Bryant's Nike sneakers with the Made in China label go for $165 in the U.S. But at an official Nike store in China? $190. A flat-screen Sony TV assembled by Chinese laborers runs about $800 at a Best Buy store in the U.S. But you'd pay 30% more at the popular Chinese appliance chain Gome. The same goes for that Maclaren Techno XT infant stroller. It's also manufactured here, but you'll typically pay 40% more for one at a Beijing mall than you would in the U.S.

[Simon_CH]

Earn a Western salary, live in China sounds like a good idea to me.

Might want to suggest that to your girlfriend. She works, you stay at home and do f all.