Sunday, February 10, 2013

Nice Infographic showing why Chinese consumers pay more for imports of certain foreign goods. See here how I link it to the Foreign Exchange Market. Gives an interesting perspective.

Here is a comparison of the price differential of certain "luxury goods" sold in China and the US.

The items below give the prices in the Chinese currency Yuan.  This shows, at the prevailing exchange rate (more on that a minute) how much the good is locally in China and how much that same good would cost the Chinese if they could exchange their currency and buy it in the US. In other words, how much Yuan are they giving up to buy the good in each place.

The current exchange rate between the US Dollar and the Yuan (CNY) is $1.00 = 6.23 CNY or the reciprocal 1 CNY = $.16.  ($1.00 "buys" 6.23 CNY or 1 CNY "buys" $.16).

To put each of the CNY numbers below in perspective, divided each of the numbers you see below by 6.23 CNY. This will give you the US Dollar equivalent.   Note: you can also multiply 22 CNY by $.16 and get the same result.

Example: In China 22 CNY for a Starbucks coffee would be (22CNY/6.23CNY) $3.53. In the US it would be (12 CNY/6.23 CNY)  $1.95.

Do the same math for the other goods to get a dollar to dollar comparison.  This is too much fun not to share! Hope you liked it.  :)
Infographic: Why are prices for Western consumer prices so high in China?
[Infographic by] [Original Chinese version by]
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