Tuesday, July 12, 2011

中美物价 - Is the Price Right?

There is a well-read article circulating online, comparing the prices in China and in the US and UK.  The zest of the article is that the prices in the developed countries are much lower than those in China.  Many Chinese readers expressed their frustration over this "fact". 

However, the prices quoted in the article are often skewed or simply wrong.  There are many facts were not known to the author of the article who admitted that he only spent two weeks in the US to investigate the prices.

1) Many prices prices listed are inaccurate. Many prices quoted were seen in shops and restaurants operated by Chinese, or in open market, while prices quoted in China were often in the department stores.  The article mentioned $0.99/pound pork or ribs.  Meat costs that low is extremely hard to find in the US if not impossible.  The quality of the meat must be miserable as well.  In the US, pork costs usually in the range of $5-8/pound.   The article even mentioned the price for BMW Z4: $21,000.  I did a quick search and found the sticker price of $43,655 - $57,500 ( http://usnews.rankingsandreviews.com/cars-trucks/BMW_Z4/ ).

2) there are historical reasons for price differences.  US is a fully developed country and the percentage daily costs are lower than the developing country as China.
3) There are many costs in the US unknown to many Chinese, such as personal income taxes.  A textbook in the US often cost $100-200 while in China they are printed on cheap paper and cost on the par of mass-market paperbacks.  In the US, medical insurance cost is very high and the article failed to mention that.
4) Many luxurious goods Chinese crave are luxurious goods to Americans as well, such as Coach handbags.
5) The low costs in the US is not sustainable.  It is supported by the huge national debts.  Relying on consumers for economic growth is like drinking poison to quench thirst.  The low tax for the rich is not a good example either.
6) The article mentioned that all the houses in the US can be called a villa.  It is not true.  The quality of American single family houses are quite low. 
7)Article also mentioned that in China, if one is well-educated, one needs to own a house (flat) otherwise he/she would not have any dignity.  Nonsense.  In the US, many house-owners take out 30-year loans and often re-finance down the road.  Once the houses are paid off, they are often near the end of the life.

In short, low prices in American have many political and historical reasons, but should not be copied.

Of course, from a consumer point of view, is unfair.

1)文章列出的好多美国物价不准确。华人的店, 基本是脏,乱,差,物价当然低。猪肉,排骨 0。99/磅, 除了赤贫,谁敢吃? 那个价现在在华人店也没有。猪肉一般是5-8 美元/磅。宝马Z4价格: $43,655 - $57,500, 不是文章说的$21000 ( http://usnews.rankingsandreviews.com/cars-trucks/BMW_Z4/ )。
3)美国人有好多其他消费,文章没有提, 比如个人税收。美国的一本教科书,一般价格$100-200。医疗保险费用高。

4)好多中国人喜欢的,对美国人讲,也是奢侈品,比如 Coach 包。
5)美国人的低物价,造成美国国力衰退。美国人的低物价是中国买的美国国债支撑的, 而且持续不下去。靠消费引导经济增长是饮鸠止渴。美国富人的低税率也不可学。
6)美国的住房并不好。所谓别墅也不准确。你们看到美国龙卷风, 水灾的报道,也应该看到那些"别墅"。



Liquor in Chinese Supermarket

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