Last week I wrote a blog to reflect the perspective of many Chinese that things are cheaper in China compared with the western countries. I have been trying to tell them it is not the case if he uses the buying power to compare. I received numerous replies from expatriates and visiting foreigners that they found things in China are relatively expensive.
Why are there mixed response from the foreigners? I guess it all depends on the kind of lifestyle you are living and the place you are residing. Beijing and Shanghai are the most cosmopolitan and expensive cities. If you dine at the Bund or Xintiandi in Shanghai or some boutique restaurants, such as Bai Family Mansion in Beijing, the dinner is going to cost you more at home. However if you go to some local restaurants where the middle income group goes, the cost is cheap. It also applies to the sundry goods as well. There are some departmental stores and supermarkets in Shanghai tailored for high spenders. These places are targeting people who cherish the elite lifestyle and willing to pay for what they want. Subsequently the rental and operating cost of these places are also high.
Renowned brandname goods cost more than at home too due to the high freight cost and customs & import duties. Ironically some of these items are manufactured in China. Also the cost is intentionally set high to create the prestige image and class. I have heard a local lament about some Chinese wants to go to Huaihai Road to buy the genuine branded goods while the Laowai (foreigners) flock to Shangyang flea market to buy the knock-offs.
If you are living in second or third tier cities, there are not much posh restaurants to go anyway. Hence the cost of living in these cities could not be high and “forces” you to have a big saving. Unless you open up yourself to adapt to the local lifestyle, you will find living there uneasy and inconvenient.
I will like to share an anecdote explaining the mentality of the local treating the foreigners. I went to a park in Guangzhou in 1990. There are two different entrance tickets. RMB 20 cents for locals and RMB 1 for foreigners. I ask them why it is so. The reply was that during Mr. Deng Xiao Ping visit to Singapore in 1979, he had discovered that the Singaporean was so well off and they ate lavishly. Of course this is relative to the Chinese standards then. Hence when he came back to China, he withdrew the subsidy at the tourist spots as the foreigners could afford higher fees. This dual entrance fees did not last long as it was too explicit and cause annoyance to the foreigners. Notwithstanding, this dual charge still exist subtlety in restaurants, shops and entertainment centers.
And this is exactly how the Chinese feels towards people who are richer than them. This also applies to richer relatives and friends. They strongly feel that it is fair and rightful for the richer guy to pay more. Hence a local Chinese guy may suddenly disappear if he strikes a lottery to prevent his relatives from coming to him for money. Or he will play dumb and hide the lottery money. I am sure this phenomenon is common in many other countries.
Some years ago, you will find most golfers in the golf course were foreigners (mainly Korean and Japanese) and the golf courses were mostly underutilized as the green fee was exorbitantly high. The golf courses were profitable even with such low patronage. And this is the way it is. Now you are finding more rich local guys at the golf courses.
Many replies to my previous blog mentioned about the high property price. Yes it is outrageously high and beyond common sense and economic theories. Too many people and institutions are overly optimistic about the economic miracle and commit too much of their resources to speculate and inflate the property bubble. Many young couples are borrowing monies from their parents and relatives to buy (they like to call it “invest”) a home for their marriage. They are willing to pump in the money in the belief that it will cost more in near future and it is a good return for money. The reality and common sense will prevail one day.
Thus you can see that China has many aspects due to her huge land mass and population. It is like the fable about seven blind men touching different parts of an elephant and each of them thought the elephant was exactly like what they had felt. On the other hand, you would also find that the Chinese is no different from ours back home. It is after all human nature and instincts. There is this universal attribute of good, bad and ugly.
Posted on 7 Sep 2009