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"Cost-of-living" Index for China (more specific, B
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Badboy Blue



Joined: 09 Apr 2004
Posts: 54
Location: soon to be in beijing

PostPosted: Sun Jul 18, 2004 6:54 pm    Post subject: "Cost-of-living" Index for China (more specific, B Reply with quote

A few posters are on the right track,
That every other post or so is usually about what is the standard or basic salary expectations for foreign teachers going to China.
But after doing a search on this topic, I found.....zilch!
So, why not ask, right?

Pay is important, but so is how much things cost.
I know the answer is going to be; "It depends on location."

No Shi'ite!!!!! Very Happy
So, what would be the "cost-of-living" index for your specific area. If we get a few answers for this question (especially for the big cities like SH or BJ), we can get a general picture of what it would like and basically, where our money is going....

But please.....
Lets talk about basic necessities first...ok Very Happy

_________________________________________
While taking a break from the "2004 Presidential Campaign Trail" Confused

Senator Kerry sits down to talk to ex-president Bill Clinton to discuss various issues that might arise during the campaign. Perplexed, John Kerry asks Mr. Clinton;

Kerry: "What do you mean by 'issues'?"
Clinton: "Why, Mr. Kerry, I really don't know how to explain issues. You'll
have to ask Ms. Lewinsky about that one"...... Shocked

____________
Sidenote~ if you think I should start a webpage for my snide, political remarks, say "yay" in your posts.
Thanks for your support
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Talkdoc



Joined: 03 Mar 2004
Posts: 696

PostPosted: Tue Jul 20, 2004 4:52 pm    Post subject: Reply with quote

...

Last edited by Talkdoc on Wed May 17, 2006 6:15 pm; edited 1 time in total
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bukowski1234



Joined: 29 Jun 2004
Posts: 67
Location: Westin, South Dakota

PostPosted: Wed Jul 21, 2004 9:57 am    Post subject: Reply with quote

Doc,

While relevant to the question in discussion, the chart does not really help anyone to determine the cost of living in actual monetary terms. What is missing are mean salaries in RMB. I don't think anyone knows this figure.

What I have been told is that in Jiangxi province near Nanchang the "average" family income of 3000 RMB per month is sufficient for the area. My salary will be approximately twice that amount. My apartment will be supplied with the package. I think that if we can compile similar statistics we'll get a better idea of the correlation between the actual cost of living vs teacher salary.
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waxwing



Joined: 29 Jun 2003
Posts: 719
Location: China

PostPosted: Wed Jul 21, 2004 11:06 am    Post subject: Reply with quote

Actually, from experience travelling in many countries I can tell you that GDP per capita is a surprisingly good indicator for living costs.
What it doesn't tell you is something that probably no indicator can tell you - the heterogeneity in prices. Like for example the fact that while a potato or a loaf of bread is a ton cheaper in Russia than in the UK, electronic goods might be about the same price. etc. etc.

I suspect that kind of thing is much better in China than in many other developing countries, since it has such a tremendously strong manufacturing base.

The only problem with the above data is that it's out of date. China is changing fast I guess.

Thanks Doc - it's better than nuttin!! Very Happy
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Talkdoc



Joined: 03 Mar 2004
Posts: 696

PostPosted: Wed Jul 21, 2004 1:56 pm    Post subject: Reply with quote

...

Last edited by Talkdoc on Wed May 17, 2006 6:15 pm; edited 2 times in total
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bukowski1234



Joined: 29 Jun 2004
Posts: 67
Location: Westin, South Dakota

PostPosted: Wed Jul 21, 2004 2:31 pm    Post subject: Reply with quote

ACTUALLY, this chart tells me nothing more than the relative economic output of each province in China. While its presence seems to elevate the discussion from a mundane level to a more intellectual level, it provides NO specific information from which one may extrapolate information about what it will cost (in currency) Badboy to live in a given lifestyle anywhere in China. I can extrapolate from the chart the expectation of a lower standard of living as one moves across the continuum from Shanghai to Guizhou, but little else.

One may predict that the STANDARD of living is higher in Shanghai than it is in Guizhou, but there is no way of knowing exactly what that standard is.

While it may cost a certain sum of money to live a certain style in Shanghai, it may be more expensive to live in the same style in Guizhou for the simple fact that the availability of certain goods and services may be very low. Given the possibility of government price supports and subsidies to make certain goods and products more affordable, the picture becomes even more cloudy.

For example:

I want to live as an upper middle class Los Angelean lives after I move to Bunkie, Louisiana.

Okay. Land is cheaper in Bunkie, and the cost of building and maintaining a house is cheaper in Bunkie than it is in Los Angeles. For the $425,000 I got for my 1500 square foot house in L.A. I can afford a 250 square foot mansion on an acre of land with a swimming pool in the backyard in Bunkie, LA. (All bought with inflated L.A. dollars)

However, I want to eat in a three star restaurant every other night. Where do I go? Hmmmm.... There's Don's Seafood down the street. Then what? I have to drive to New Orleans for the Court of two Sisters, Brennan's, and maybe Ralph and Kakoo's--- 200 miles roundtrip. Whoa.

I want to pick up a nice wine a few nights a week for dinner at home. Well, it's forty miles to Baton Rouge and a hundred miles to New Orleans. The price I pay for that wine won't be Bunkie, Louisiana Ripple prices but New Orleans prices, plus shipping expenses.

I brought my Audie with me from Los Angeles. Now it needs a new framazama which can be installed and purchased ONLY through the dealership which is in New Orleans. Two hundred miles worth of gas, a night in a hotel in the French Quarter (Audi can't fix the car today, so I have to stay overnight), dinner, and cabfare. Right there, I'm out $750.00 just because I want my Audi.

Rent a movie? In Bunkie, Louisiana? Forget it unless you REALLY love life behind the wheel of an automobile.

NOW I realize that the comparison of the two local economies did not contain enough information for me to make an informed decision about maintaining my Los Angeles lifestyle in Bunkie, Louisiana. I went from making $250,000 a year as a program analyst in Silicon Valley to a similar position in nearby Baton Rouge which pays only $80,000.00 per year. The cost of maintaining my Los Angelean lifestyle in Bunkie, Louisiana is impossible at my Bunkie, Louisiana wages.

Now, take a similar Shanghanese standard of living and apply it to Guizhou. Does Doc's chart tell you anything about the cost of living or maintaining a given lifestyle anywhere in China? Nope. At least, not unless you possess other information from another source-- such as personal experience.

Doc, does Tibet REALLY have a more active economy than Jiangxi? Nanchang , Jx is a pretty heavily industrialized city. I can't imagine what economic activity in Tibet would surpass that of the agricultural and industrial activity in Jiangxi.
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Talkdoc



Joined: 03 Mar 2004
Posts: 696

PostPosted: Wed Jul 21, 2004 3:46 pm    Post subject: Reply with quote

...

Last edited by Talkdoc on Wed May 17, 2006 6:15 pm; edited 5 times in total
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bullitt



Joined: 12 Dec 2003
Posts: 49
Location: Shanghai

PostPosted: Wed Jul 21, 2004 3:49 pm    Post subject: Reply with quote

bukowski1234 wrote:
Doc, does Tibet REALLY have a more active economy than Jiangxi? Nanchang , Jx is a pretty heavily industrialized city. I can't imagine what economic activity in Tibet would surpass that of the agricultural and industrial activity in Jiangxi.


Maybe tourism.

The other thing I would point out is that another consideration is the availability of goods and services. More purchasing power out in the rural areas is a bit of a moot point if there is nothing that you want to buy there.
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bendan



Joined: 18 Jun 2004
Posts: 739
Location: North China

PostPosted: Thu Jul 22, 2004 1:10 am    Post subject: Reply with quote

I don't think the table is of much use at all. How would you use it to compare Guangzhou with Tianjin? Guangzhou (a city that is part of Guangdong) has a far higher standard of living than Tianjin (a municipality), but the table might suggest otherwise.

I also don't agree that having 10,000 in Shanghai is like having 4,000 in Dalian. I'm sure there's a difference, but it certainly isn't that big. Perhaps your friends just mean that they spend much more in Shanghai.
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gmat



Joined: 27 Jan 2003
Posts: 274
Location: S Korea

PostPosted: Thu Jul 22, 2004 3:04 am    Post subject: Reply with quote

Quote:
Well, I am not an economist


Good thing Wink

Quote:
but I think common sense would suggest that a city's GDP (defined as the total value of goods and services produced by that city for domestic consumption)


GDP is not focused on domestic consumption. It deals with production.

Gross Domestic Product. The total market value of all final goods and services produced in a country (in Docs example it is by city) in a given year, equal to total consumer, investment and government spending, plus the value of exports, minus the value of imports.
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Lee_Odden



Joined: 22 Apr 2004
Posts: 172

PostPosted: Thu Jul 22, 2004 3:56 am    Post subject: Reply with quote

Personally, I appreciate the fact that someone took the time and energy to add something to this discussion other than his opinion or a cheap-shot.

It's been awhile since I took Economics 101, but I do recall that there is a relationship between GDP and Cost of Living Index. I believe on a macro level, cost-of-living index is calculated by GDP/# of Consumers.

Nevertheless, I found the GDP data informative even though not directly on topic.
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gmat



Joined: 27 Jan 2003
Posts: 274
Location: S Korea

PostPosted: Thu Jul 22, 2004 5:31 am    Post subject: Reply with quote

Well Lee, I appreciate the work that Doc has done too, I was simply pointing out an error, just as I will point out your error:

Quote:
I believe on a macro level, cost-of-living index is calculated by GDP/# of Consumers.
Confused

Cost of Living Index:
a measure of change in prices of goods and services over periods of months or years; used by economists to discern amount of money needed to maintain a specific standard of living; measures changes in consumer purchasing power (the relative value of money in relation to goods and services); in the U.S. is called the cost of living index or consumer price index.


A Cost of living index deals with purchasing power and inflation.


edit. I found some data on a few Chinese cities here : http://www.paulnoll.com/China/Culture/commerce-cost-living.html
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Lee_Odden



Joined: 22 Apr 2004
Posts: 172

PostPosted: Thu Jul 22, 2004 6:06 am    Post subject: Reply with quote

gmat wrote:
Well Lee, I appreciate the work that Doc has done too, I was simply pointing out an error, just as I will point out your error:


I believe it was Oscar Wilde who said "A little bit of knowledge is a dangerous thing." (I didn't bother to check the source - I am comforted by the knowledge that GMAT will check and correct it for me if I am wrong.)

On a micro level, yes, cost of living index is defined as the amount of money it takes to purchase a fixed "bundle of goods" compared against some baseline in time. On a macro level, the index is calcuated differently.

Check out http://www.aier.org/cgi-aier/board.cgi?read=225 for a thorough discussion of the topic by a real economist.

As far as Doc goes, the small error in his definition in no way affected the validity of his discussion. The point was, and still is, that GDP is related to standard of living, consumer consumption and cost of living. Although, as was stated repeatedly, the relationshp is not "a linear one."
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struelle



Joined: 16 May 2003
Posts: 2372
Location: Shanghai

PostPosted: Thu Jul 22, 2004 9:32 am    Post subject: Reply with quote

This a great and relevant thread, but I'd take the side of those who disagree with GDP per capita relating to cost of living (linear or not). Production and consumption measures are different.

One simple experiment to do is to look up various countries on the Lonely Planet and compare the GDP per capita with the 'Money and Costs' section. I wouldn't bank on the accuracy of both figures, but what I can see is that the countries with the lowest cost of living (hence travel value) are not necessarily those with the lowest GDP per capita.

Consider a few countries that have great travel deals, i.e. low costs. Here's what strikes my fancy: Thailand, Vietnam, Egypt, Madagascar, Bangladesh, India, Turkey, Sri Lanka. Trust me, I love doing this research.

In order of living costs compared with GDP / capita:

(1) Bangladesh ($4 / day) (1) Madagascar: 800
(2) Madagascar ($8 / day) (2) Vietnam: 1300
(3) India ($10 / day) (3) Bandladesh: 1380
(4) Egypt ($15 / day) (4) Thailand: 2168
(5) Thailand ($16 / day) (5) India: 2200
(6) Vietnam ($18 / day) (6) Turkey: 2490
(7) Turkey ($20 / day) (7) Sri Lanka: 2500
(Cool Sri Lanka ($20 / day) (Cool Egypt: 3600

It doesn't correlate very well. One example is with India and Sri Lanka, with relavitely simlar GDPs. Possible they have to import many consumables into Lanka which raises the living costs.

Steve
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waxwing



Joined: 29 Jun 2003
Posts: 719
Location: China

PostPosted: Thu Jul 22, 2004 11:06 am    Post subject: Reply with quote

gmat wrote:
http://www.paulnoll.com/China/Culture/commerce-cost-living.html

What the heck is going on in that table? Beijing is 50% more expensive than New York? Mm hmm
btw 'Clothing and Foot ware[sic]' isn't hugely impressive Smile

and struelle, comparing the ordering is not particularly good statistically. If you want to demonstrate a correlation you should measure the standard deviations and ..etc. well I can't be bothered remembering, but anyway the ordering is a poor test of correlation.
All the same I admit that GDP/capita is not the same - even if there is a vague correlation.

The problem I have is that the only thing you'll generally find is studies commissioned by big business who want to find out how much it's going to cost on the expense accounts of their managers, so they measure like the cost of a 5 star hotel room or something and then they say oh, Moscow is the most expensive city in the world or whatever. Well, not really.. Rolling Eyes
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