Inflation in china

[NewDay2006]

I was listening to a radio program this morning and they were talking about inflation and the high prices of food in China now. I guess the inflation includes Real Estate and just about everything else too.

 

My wife will go to China in a couple of weeks, I'm thinking she will be very surprised. Has anyone been there recently to comment on this.

 

I can remember when I first went there in 2004, I was in shanghai and everything was so cheap... not the case as the years went by... it's been 3 years since I've been there last after going for 5 straight years.

Edited January 6, 2011 by NewDay2006 (see edit history)

[Scott@Hong]

I first went to China in 2004 also, and back then I was amazed how cheap everything was and I used to tell people the exchange rate was 7 to 1, but cost wise 1Rmb = $1. Back then you could by a soda for 1 or 2RMB same as buying a soda in the States for 1-2 dollars.

Clothes were the same, shirt costs $50 in the states was 50RMB in China.

 

Fast forward to November 2010 (last time I was in China), now everything the same or more expensive in China

That soda is now 7-10RMB, That shirt is now 300RMB.

 

I actually have Chinese relatives and friends now wanting me to buy them things in the States and bring to them in China every trip because it is cheaper, especially with electronics.

[knloregon]

We in the states don't think of food prices as being particularly inflationary to the overall economy, since our food budget represents such a small part of our over all budget. Not true in China, were it can represent up to 1/3rd. of family expenses. There have been a number of multi-whammy events driving food prices in China----one is that after a two year hiatus, many of the migrant laborers, driven back to the farm, are returning to construction jobs --etc. in the big cities, resulting in much higher wages for those left to tend the crops. Part of it is fear and rumor ---remember a couple of years ago when rice prices went through the roof---even though there were few real shortages---sort of like Wall Street driving oil (gasoline) futures up without justification. Right now, its cooking oil in China, and Wen Ja Bo has apparently (expats in China, can you confirm?) actually went on national TV to take questions from citizens---and reassure them that China has plenty of cooking oil. China believes it can control the food inflation problem --- we will see.

[MoonCarolCafe]

I was listening to a radio program this morning and they were talking about inflation and the high prices of food in China now. I guess the inflation includes Real Estate and just about everything else too.

 

My wife will go to China in a couple of weeks, I'm thinking she will be very surprised. Has anyone been there recently to comment on this.

 

I can remember when I first went there in 2004, I was in shanghai and everything was so cheap... not the case as the years went by... it's been 3 years since I've been there last after going for 5 straight years.

 

 

The rise in real estate prices is at best only tangentially caused by inflation. Especially in the 1st tier cities housing has been trending unaffordable for several years. The inflation talked about in the news recently has been primarily related to the cost of foodstuffs, due to the increase in costs of agricultural inputs. Inflation is a particular issue because the cost of food has increased significantly faster than the wages of people buying the food. The cost to BUY housing is near obscene in places but the cost to RENT is still pretty flat over the past few years.

[Stone]

I first went to China in 2004 also, and back then I was amazed how cheap everything was and I used to tell people the exchange rate was 7 to 1, but cost wise 1Rmb = $1. Back then you could by a soda for 1 or 2RMB same as buying a soda in the States for 1-2 dollars.

Clothes were the same, shirt costs $50 in the states was 50RMB in China.

 

Fast forward to November 2010 (last time I was in China), now everything the same or more expensive in China

That soda is now 7-10RMB, That shirt is now 300RMB.

 

I actually have Chinese relatives and friends now wanting me to buy them things in the States and bring to them in China every trip because it is cheaper, especially with electronics.

 

 

In 2004, the exchange rate was $1 = 8.28RMB. Now $1 = 6.65RMB. With rising inflation in China, I am wondering why American manufacturers are still insisting that Chinese yuan is under-valued by 40%. I am thinking the opposite. I am interested in finding out why there is still such a trade gap with the U.S., when you know things are getting so expensive in China nowadays.

[Urkidding]

I was listening to a radio program this morning and they were talking about inflation and the high prices of food in China now. I guess the inflation includes Real Estate and just about everything else too.

 

My wife will go to China in a couple of weeks, I'm thinking she will be very surprised. Has anyone been there recently to comment on this.

 

I can remember when I first went there in 2004, I was in shanghai and everything was so cheap... not the case as the years went by... it's been 3 years since I've been there last after going for 5 straight years.

 

 

 

Hello Cuzin Charles,

 

To answer your question I must say everything was quite reasonable. The family and I just came back from China after a couple of weeks of visiting relatives over the holidays. We traveled from south China to the north and quite frankly, I enjoy myself immensely. While there, we stayed in some pretty nice hotels while we toured around Shanghai, I thought the hotel prices were good. We didn¡¯t stay in a 5 star hotel, but they were 4 star rated hotels right off the main drags in the areas that we stayed.

 

While I thought everything was quite reasonable, my wife seemed to think the prices have skyrocketed. Now keep in mind she goes back every couple of years and I haven¡¯t been back in over six years. B)

 

She said that eating out prices sky rocketed. Vegetables and other staples had gone up too, especially the pork and other meat prices. Housing had also skyrocketed which would explain why the investors (builders) are real busy and you see construction everywhere you looked. Petro was very reasonable and there were a LOT more cars on the road since I was there last.

 

As always, my trip didn¡¯t last that long as I was only there a short time. Still long enough to blow some serious money, but then again, I don¡¯t get to go to China that often.

[Jaseball]

Areas such as Hong Kong, Shanghai, Beijing, Guangzhou, or other coastal or large cities were already up to our prices years ago for luxury items like hotels, fine dining, alcohol, and as others have said the real estate in those areas were also very much inflated and have been going up. China real estate is going to pop sooner or later, just like the US. May take 10+ years but it is going to pop.

 

The gap of the have and have nots in China is even worse than here. Most of us met our partners where? Over the internet, in a major/modern urban area in China, through friends, chance meeting, etc., but in almost all cases we met through modern means and met someone who has access to the internet, phone, etc.

 

Large parts of China are just uninhabitable and there are other large areas where people barely scrape by and the idea of electricity, cars, computers, etc., is totally foreign, so perhaps 10% or less of China is really what we see in the news.

 

We're also just talking out of our ass. We're the ones who sell our TBills, other secured/unsecured debt, CDO's, and insurance products to China and then complain. If their currency get's valued at 40% more than now, does that mean the jobs our corporations sent over all of a sudden come back here? I don't think so.

 

I wouldn't worry about China inflation. It get's bad there the government will crack down and put up huge tariffs, restrict consumption, sieze private troves of the 'rare,' items, and do all they can to curb the problem, just like they did with the pork shortage 2 years ago.

 

I'm not a fan of Communist or Socialist societies, but you can't argue that that these types of societies protect their own first and can act very fast. We just talk a bunch of bullshit, let more and more years pass as the problem gets worse, and then the people who created and prospered from the problems retire and leave the mess for someone else to deal with.