Report from China

My wife is currently in China, and reported back on recent changes:

1.  Young people in Beijing now carry little cash, and use their cell phone to buy things.

2.  They like to order take out.  It’s often cheaper to use your cell phone to order delivery of a cup of coffee, than to buy one at Starbucks.  Must be nice.

3.  The apartment buildings have individual storage boxes for delivery packages.  The delivery person has the code to open it and leave a package; you use your cell phone to open it and pick up your package. Maybe this high tech stuff is also common here, I’m totally out of touch.  But China wasn’t like this back in 2012, our previous trip.

4.  A Uber-type taxi company is very popular, quick to arrive, and extremely cheap.  It’s first come first serve.  (Last time I was there regular taxis were also cheap, but hard to get.)

5.  She went to a wedding costing $65,000.  I asked if the family was rich, and she said “no.”

6.  One restaurant she attended required all patrons to put their cell phones in small paper bags on the table while they ate dinner.  The goal was to get them to talk to each other, rather than play with their phones.

7.  The police are cracking down on drunk drivers, and as a result people have dramatically cut back on drinking at restaurants.  Many Chinese are now afraid to have even a single drink during dinner.

8.  Services are still really cheap for the locals.  One very nice banquet she attended in a private dining room had 26 dishes, and cost a total of $130 for 13 people.  That includes tax (there is no tipping in China.)  The Chinese Groupon program allows thrifty people to enjoy lavish dinners at even lower prices.  If you are a tourist visiting China you will probably not see these prices; you will pay Western prices for dinner. (Unless you are a famous blogger with unusual restaurant evaluation skills.)

9.  But you will see very low prices for subways, taxis and many other services.  In 2014 3.41 billion rides occurred on the subway, most of any city in the world.  The fare was 32 cents.  (This year it was increased.)  Beijing is expected to add 7 new or extended subway lines this year.  Hey NYC, how’s that Second Avenue line coming along?

10.  Her mom’s maid takes high-speed rail home on holidays.  (700 miles in 4 hours) That’s right, the system “only the rich” would be able to afford.  (Or so they said as recently as 2010, which is like a generation in Chinese terms.  And let’s not even talk about Amtrak today.

Beijing’s official GDP per capita is $16,150, but the actual figure is probably closer to $30,000, in PPP terms.  I would put the odds of Beijing/Tianjin/Yangtze Delta/Pearl River Delta getting stuck in the middle-income trap at roughly zero.  But those regions represent 15% of China. For the rest of Han China, I’d say the odds are 3%.  For western China, 20%.

PS.  Timothy Lee interviewed me for an article on currency manipulation.  Here it is.

PPS.  I have a new post at Econlog criticizing the absurdly high taxes on state lotteries, focusing on the impact on inequality.


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49 Responses to “Report from China”

  1. Gravatar of David Pinto David Pinto
    13. May 2015 at 06:51

    The police are cracking down on drunk drivers, and as a result people have dramatically cut back on drinking at restaurants. Many Chinese are now afraid to have even a single drink during dinner.

    But you will see very low prices for subways, taxis and many other services. In 2014 3.41 billion rides occurred on the subway, most of any city in the world. The fare was 32 cents. (This year it was increased.) Beijing is expected to add 7 new or extended subway lines this year. Hey NYC, how’s that Second Avenue line coming along?

    These must be the advantages of living in a police state. No thanks.

  2. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    13. May 2015 at 06:54

    Report from Tacoma, WA, supposedly a major American population center;

    ‘Tacoma Mayor Marilyn Strickland announced the formation of the task force last week, a day after the Tacoma-Pierce County Chamber wrote her a letter to ask for a “right-sized local solution” to raising the minimum wage in Tacoma.’

    And appointed a Goldilocks to the task force;

    https://www.facebook.com/photo.php?fbid=608199255927872&set=a.387011544713312.91870.100002134103603&type=1&theater

    Abranna Romero Rocha (in the red plaid), Lincoln High class of 2017.

  3. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    13. May 2015 at 07:06

    I forgot the link to the Tacoma Minimum Wage Task Force story;

    http://www.thenewstribune.com/2015/05/12/3788115_tacoma-mayor-to-name-minimum-wage.html?rh=1

    I think it’s great the Raise the Minimumers have a poster girl–who is probably a perfectly nice person.

  4. Gravatar of James Bradbury James Bradbury
    13. May 2015 at 07:13

    1. This has been true among the college-age generation for about 1-2 years now; I remember after a group lunch watching everyone get their phones out to split the bill last summer.
    4. There are two of these companies (Didi Dache and Kuaidi Dache) and they connect you with ordinary licensed taxi drivers who use the driver version of their app. The two firms are in the process of merging to better compete with Uber and other potential foreign entrants but have been under fire (and antitrust scrutiny) for forming a near monopoly.
    5. Not rich but definitely upper middle class.
    6. Haven’t seen that but it sounds like an excellent idea.
    9. Their next expansion after building the 2016 lines is going to include “express” lines that double up below existing lines that are at capacity – the primary reason for this year’s fare hikes isn’t revenue but overcrowding.

  5. Gravatar of Jonathan Zhou Jonathan Zhou
    13. May 2015 at 07:24

    Scott, you’ve been a stalwart China optimist for years, why not write something from the pessimistic angle, the same shared by the country’s ruling elite, who are emigrating as fast as they can? If someone only read all your blog posts in China, they’d be scratching their heads as to why the rich and powerful would ditch their home-base social capital for a foreign land.

  6. Gravatar of Brett Brett
    13. May 2015 at 07:44

    1. Glad to hear it. That seems to be common in poorer countries with newer financial systems, like East Africa.

    3. We have electronic Amazon storage lockers, but they’re not super-common. Part of that has to be suburbanization – lockers make more sense when you’re living in an apartment building rather than a sprawling suburb.

    4. I’d heard about them. It’s one of the reasons why Uber and Lyft are having trouble breaking in.

  7. Gravatar of ssumner ssumner
    13. May 2015 at 08:06

    David, I’m afraid you lost me somewhere.

    James, Excellent comment, thanks. I’ve been calling for higher fares for many years (and higher taxi prices) exactly for the overcrowding reason.

    Jonathan, I don’t really think I’m more optimistic that the ruling elite. I’d also try to get the hell out of there if I was a wealthy Chinese person, as living standards in the US/Canada/Australia are far higher, and likely to remain higher for many decades. People still move here from South Korea, which is now a developed country.

    I’m saying living standards are rising fast. But they are rising fast from a very, very low level. If you talk to Chinese billionaires who suffered from hunger in the 1970s, I doubt they’d disagree.

    As far as people “scratching their heads” I find that most people don’t read what I say, but rather sort of lazily focus on the tone of the post. (I’m not a fan of the Chinese government or the Chinese economic system or even the Chinese transportation system.) There’s not much I can do about that problem, other than trying to express myself as clearly as possible.

    The bottom half of this post might help put things in perspective:

    https://www.themoneyillusion.com/?p=10259

  8. Gravatar of ssumner ssumner
    13. May 2015 at 08:12

    Jonathan, Quick follow up on transport. I mentioned their rapidly improving rail system. But what matters most to me is roads and air travel, and the Chinese government has badly botched both. But that’s a “dog bites man” story, why should I blog on how messed up things are in China? Everyone knows that already.

    The “man bites dog” story is that China is no longer is as poor as sub-Saharan Africa,

  9. Gravatar of benjamin cole benjamin cole
    13. May 2015 at 08:12

    Scott: I read that the PBOC has been doing QE all along…infrastructure is QE financed?

    Seems to me China has an awful lot of state-planning…and they will blow by the U.S.

    Not a comforting thought….

  10. Gravatar of AbsoluteZero AbsoluteZero
    13. May 2015 at 08:49

    Scott,
    First, good post.

    Regarding #5, as James Bradbury said, while they may not be rich rich (really depends on one’s definition, as always), they’re probably at least middle if not upper middle class. Also, as you surely know, people save up for these things. So it’s not like US$65K is not a lot to them, it probably is, but they save up for it and can afford it.

    As for what Jonathan Zhou said, in addition to what you said already, I want to add a couple things. First, it’s mostly economic, and it’s not just per capita GDP, which makes it obvious in the case of China. It’s also opportunities in many industries, although China is rapidly improving in this regard as well. For example, people move from Hong Kong to Canada or the US today. Hong Kong has a per capita GDP (PPP) that’s the same as that of the US and higher than that of Canada. But even Canada offers many more opportunities in many industries that just don’t exist for Hong Kong. Second, most people are not really “ditch(ing) their home-based social capital for a foreign land”. I know many people from China, Taiwan, Hong Kong and Macau. They all maintain ties to all these places long after their move. My family moved from Hong Kong to Canada in the late 1980s, and a decade later I moved to the US because of a job. Canada was not foreign to us, at all, when we first moved there. We flew back and forth between Hong Kong and Canada, several times a year, for years after. Many of my friends in Canada still do today. I maintain ties to both Hong Kong and Canada, have friends and family in both, and travel back and forth often. We didn’t “ditch” anything, and it wasn’t for a “foreign” land, we were simply moving to where we believed we could do more of what we wanted to do, and I will probably move again when another opportunity comes up.

  11. Gravatar of ssumner ssumner
    13. May 2015 at 09:09

    Benjamin, China will not “blow by” the US in per capita GDP. Not even close. Second, China is doing well precisely in those areas that are moving away from state planning. The private sector is the most vibrant part of the Chinese economy. As they further privatize, they’ll begin to close the gap with Hong Kong, Singapore, etc. Even the Beijing subway system has more private sector involvement than the New York system (although it’s still mostly government run.)

    I don’t think the infrastructure is QE financed.

    Absolute Zero, Excellent comment, I entirely agree.

  12. Gravatar of Jose Romeu Robazzi Jose Romeu Robazzi
    13. May 2015 at 09:43

    I have a friend that came last week from Hong Kong / Macau. He saw something a little different, Ferraris, Maseratis, McLarens and other fancy cars on the streets. Perhaps Hong Kong is different …

  13. Gravatar of AbsoluteZero AbsoluteZero
    13. May 2015 at 10:21

    Scott,
    Thanks.

    Something I forgot to mention. In addition to maintaining ties, it’s not uncommon for people to move back. I used to work with someone in a startup in Silicon Valley. Originally from Shanghai, she moved to the US several years before I did, more than 20 years ago. She has kids, all born in the US. Recently she moved back to Shanghai. A company offered her a position in management far higher than anything she’d had in the US. In this case, she was not only going down in per capita GDP in terms of the countries, by a lot, she was also going down in personal income, but she gained an opportunity that at least she believed she wouldn’t have in the US, enough that she was willing to move her family again. This happens, probably more than many people realize.

    I think one issue is that many people, particularly Americans, have a particular notion of immigration. They seem to imagine people packing their bags, getting on a ship, leaving everything behind and not looking back. This happens too, of course, but all the people I know who moved from Asia to the US or Canada didn’t do it like that. They all maintain strong ties, and some moved back later.

  14. Gravatar of TallDave TallDave
    13. May 2015 at 12:15

    Beijing’s official GDP per capita is $16,150, but the actual figure is probably closer to $30,000, in PPP terms.

    The cities have certainly undergone a transformation, but it’s getting harder to say living standards are still rising when the air quality is so bad they are actually off the charts in some areas.

    http://kotaku.com/compare-how-awful-chinas-pollution-is-to-where-you-liv-1552652798

    And fixing the ongoing environmental catastrophe will increase costs, which will reduce their competitive advantage as well as their PPP multiplier.

    And while I hope they can navigate the middle income trap, the private sector may be increasingly isolated as the oligarchs of the CPC protect their interests from creative destruction.

  15. Gravatar of TallDave TallDave
    13. May 2015 at 12:51

    The way China has doubled exports every five years is one of the great economic and humanitarian miracles of our time, but it’s hard to imagine how they could reach $4T in annual exports by 2019.

    http://en.wikipedia.org/wiki/List_of_countries_by_exports

    http://www.tradingeconomics.com/china/exports

  16. Gravatar of Scott Sumner Scott Sumner
    13. May 2015 at 12:57

    Jose, Hong Kong is much richer.

    Absolutezero, Good points. And in a better world the back and forth migration would be much more routine.

    Talldave, You said:

    “but it’s getting harder to say living standards are still rising when the air quality is so bad they are actually off the charts in some areas.”

    Don’t believe what you read. I travel to Beijing about once every three years, and stay there a month. The pollution was already very bad in 1994; I haven’t noticed it get worse since, although it may have. Life expectancy in Beijing is significantly longer than in the US. Yes, pollution is a big problem, but it’s completely, utterly trivial compared to the gains in living standards in other areas. I would not put it in the top 5 of China’s problems. About 2 hours after landing I stop thinking about it, and rarely notice it for the rest of the trip. There are still lots of days in Beijing where the sky is blue—my wife experienced some of them on her recent trip.

    America had horrible pollution in the old days, so much so that the white shirts of executives in Pittsburgh would look grey by the end of the day. At least Beijing’s not that bad, and indeed just decided to close all coal-fired power plants in the capital. So the clean-up is already well underway.

    You said:

    “as the oligarchs of the CPC protect their interests from creative destruction.”

    It’s way too late for that, there’s an absolute orgy of creative destruction going on in China. China’s economy is not at all like the Soviet economy, it’s very dynamic.

    But I do appreciate your comment. There’s so much misinformation about China that I feel a need to constantly write posts setting the record straight.

  17. Gravatar of Scott Sumner Scott Sumner
    13. May 2015 at 12:58

    Talldave, I agree with your second comment, it’s mostly domestic growth from this point forward—especially services.

  18. Gravatar of Chris Arnade Chris Arnade
    13. May 2015 at 13:13

    Scott
    Good to see your take on Lotteries. I wrote a piece for the Guardian on them,
    http://www.theguardian.com/commentisfree/2014/feb/16/powerball-lottery-real-stupidity-tax

    pointing out that, yes they might be an absurd investment for most, for the wealthy they are often the only form of easy leverage available.

    With very high rates of interest.

    You can reframe the math to say, Lotteries are fair odds but with really high cost of borrowed money

    Regardless, I agree with your piece.

  19. Gravatar of Chris Arnade Chris Arnade
    13. May 2015 at 13:14

    sorry, typo in above comment, Should of read (For the POOR they are often the only form of easy leverage available) not for the wealthy.

    Oops.

  20. Gravatar of Jim Glass Jim Glass
    13. May 2015 at 13:34

    “Hey NYC, how’s that Second Avenue line coming along?”

    It’s still coming! Still coming … as it has been since before I was born.

    But everything has its benefits. A few years ago the NY Times ran a wonderful editorial that confused it with the #2 train throughout. What better way for editorial leadership to prove to all how much they are “of the people” than to express their personal concern about the subways?

    ‘Twas a laugh riot throughout the city. No matter how much work and skill is put into ridiculing somebody, it is never even 2% as effective as seeing them ridicule themselves.

  21. Gravatar of Bonnie Bonnie
    13. May 2015 at 18:27

    Thank you for sharing this with us. It’s interesting to hear about economic life in other counties.

  22. Gravatar of LC LC
    13. May 2015 at 18:36

    Scott:

    You’re too pessimistic on western China. For one, it’s got many things rest of China doesn’t have: beautiful open spaces, lots of natural resources and the intersection point of Asia and Europe. Second, with the new silk road initiative and the reform gathering pace in India, economic activity will only pick up pace. Three, we are just beginning to see reform and renaissance in Islamic world after much soul searching. Places like Pakistan are starting to get into better shape. The performance of central asia will surprise many down the road.

    One more point on China: many in press and in comments have ridiculed Chinese institutions, getting their ideas from Acemoglu and Robinson. What they lose sight of is that China had some of the best institutions from antiquity until beginning of 20th century. The Chinese Civil Service Examination system survived for almost 2000 years and generated the idea amongst billions that education pays. In modern times, we often lose sight of these historical facts, and ignore that China is slowly adopting modern standards with ancient experience.

  23. Gravatar of TallDave TallDave
    13. May 2015 at 19:16

    Life expectancy in Beijing is significantly longer than in the US.

    Not for Asian-Americans (87 years). Also, I’m not sure a reliable source exists for that statistic in China; heck, even within the OECD, the OECD itself warns against intercomparability of things like perinatal mortality statistics. And… well.

    Anyways you make a great point about pollution being a small problem next to the rise in overall living standards, but like the export growth that’s a trend that now starts to cut against them, because as basic needs are met the marginal detriment of the remaining smaller problems increases. And those charts at the links are a bit scary.

    It’s way too late for that, there’s an absolute orgy of creative destruction going on in China.

    I hope that continues, but I’m pessimistic — very rarely in world affairs do those with all the political power allow their wealth to be removed from them. But maybe I underestimate their sense of rajadharma. Let’s see where the SOEs stand in five years — and whether elections are on the horizon.

  24. Gravatar of Ray Lopez Ray Lopez
    13. May 2015 at 19:53

    #11. – All the so-called “stats” by Sinophile Scott Sumner (S3) are bogus.

    I visited Beijing and a few other cities in China about 8 years ago and saw none of the things Sumner talks about. He’s like Herodotus speaking about Africans who had their head embedded in their chest and other such tall-tales designed to impress armchair tourists. But the ancient Greeks did get the giraffe right, so there might be a small kernel of truth in at least one such ‘fact’ reported by S3, but I would not know which one.

  25. Gravatar of Nathan Nathan
    13. May 2015 at 22:54

    Scott: This is what China has in 2015, which it didn’t have in 2012.

    Ray: Lies!! I saw nothing like that in 2007!

  26. Gravatar of Miami Vice Miami Vice
    14. May 2015 at 08:50

    Life expectancy is NOT significantly lower in the US than Beijing.
    Roughly 78 in the US and 76 in Beijing according to a quick google search. Not sure how either is calculated but doubt it would make your statement any more true, more likely it would be the opposite.

    Life how you praise Chinese fiscal policy.

  27. Gravatar of Miami Vice Miami Vice
    14. May 2015 at 09:13

    Never reason from your wife’s anectodal evidence.

  28. Gravatar of Miami Vice Miami Vice
    14. May 2015 at 09:15

    Never reason from made up stats.

  29. Gravatar of Robert Robert
    14. May 2015 at 10:24

    Worth a read

    http://www.worldlifeexpectancy.com/china-health-miracle

  30. Gravatar of Mike Rulle Mike Rulle
    14. May 2015 at 10:48

    According to CIA.Gov, GDP per capita (PPP) in China was $12,900 (est) in 2014, not $30,000. Why are China’s own numbers so different?

  31. Gravatar of ssumner ssumner
    14. May 2015 at 14:32

    LC, You left out the most important point, it’s not majority Han. I’m actually not pessimistic about western China. If it was independent, I’d be 10 times more pessimistic. It would be another Uzbekistan.

    Talldave, Ok, but would you agree it’s similar to South Korea. What I object to is people calling the air pollution a “catastrophe.” China has much more serious problems to deal with.

    Nathan, It’s so much fun picking on Ray. And people actually ask me why I respond to him.

    Miami Vice. You must be a masochist, as you know by now that I’m just going to ridicule you. You said:

    “Life expectancy is NOT significantly lower in the US than Beijing.
    Roughly 78 in the US and 76 in Beijing according to a quick google search.”

    Let’s see, I’ve spent about 6 months doing intensive collection of Chinese data, and you’ve done a quick Google search. I found life expectancy to be 81.35 in 2012, and you report 76, and no year.

    And I never made any comments about China’s fiscal policy. Are you trying to compete with Ray for stupidest comment?

    Mike, Those number’s sound about right for China. I never said anything about China’s GDP in this post, I was discussing Beijing.

  32. Gravatar of collin collin
    15. May 2015 at 04:48

    So it America in the 1920s with lots of new rich people but enough poor people to keep everything cheap! (OK at least China did not have Prohibition but do they have Jazz?)

  33. Gravatar of Friday assorted links Friday assorted links
    15. May 2015 at 07:58

    […] Scott Sumner and his wife on China.  And is there low-hanging fruit in the fight against inequality?  If so, how many people are […]

  34. Gravatar of Sean Sean
    15. May 2015 at 13:09

    I have looked into the air pollution in detail. For a whole year, Beijing is 3-4x worse than Seoul, which is in turn 2-3x worse than my hometown Austin. A couple weeks ago on the day I checked, Beijing was 6x vs. Seoul, and Seoul was 4x vs. Austin. (I’m talking about PM2.5, though the stats when looking at PM10 aren’t too different.)

    As someone who regularly goes to both, saying Chinese air quality is same as Korean is laughable.

    Probably the indoor air quality differentials are even worse than the above, if anything. Cigarette smoke absolutely ruins indoor air quality in terms of PM2.5.

    Also disagree some with your purchasing-power deflators. The same car in Bejing will cost you a lot more than the U.S. The same house – if you want to buy not rent – will cost the same or more. Cosmetics and many electronics (rice cookers etc.) are cheaper in the U.S. on an apples-to-apples basis.

    Thanks for the post. I think other commenters are wrong to denigrate it. China is great at many things, including the political will to override NIMBYs and get net-positive infrastructure/transit projects done on time and in significant number. On the other hand, as someone who goes to China and BJ regularly, the quality of life for me personally seems lower than in other $30k GDPPPP countries (e.g. Chile is moderately below that).

    But you are definitely right that (partly due to the absence of stupid licensing restrictions) semi-skilled and skilled labor like maids, plumbers, etc. that’s stupid expensive in many other countries is very affordable in China. In addition, tech-enabled advances are making quality-of-life go up quite fast in certain areas. (Especially in Beijing which is like SF in that the mainland tech companies launch app pilots there.)

  35. Gravatar of ssumner ssumner
    15. May 2015 at 16:18

    Sean, You said:

    “As someone who regularly goes to both, saying Chinese air quality is same as Korean is laughable.”

    I agree, and that was exactly my point. Korea and Beijing have comparable life expectancy, despite Beijing having far worse air quality.

    I don’t agree that real estate is more expensive, as New York is the only American city that is comparable to Beijing. My mother-in-law’s apartment is far cheaper than it would be in NYC.

    I certainly agree that the quality of life in Beijing is much lower than the typical 30,000k country. That gets into philosophical questions of what GDP is supposed to measure. I’d rather live in Greece than Beijing.

    Are you comparing Beijing to Chile, or Beijing to Santiago? Obviously Chile is much richer than China, and Santiago is richer than Beijing.

    Beijing has 63 cars per 100 households (probably more by now), which is pretty impressive given that a few years ago they had roughly zero. Chile has 23 per 100 people, the per household numbers are probably similar to Beijing, despite those high Chinese car prices.

    Otherwise I mostly agree with your comment.

  36. Gravatar of Major.Freedom Major.Freedom
    15. May 2015 at 16:58

    Air pollution adversely affects people’s health in more ways than life expectancy.

  37. Gravatar of rob rob
    15. May 2015 at 18:11

    I have lived in Beijing the last 4 years, it is crazy how quickly things have changed in even that time period. One thing I would like to point out is that the air pollution has been dramatically better, it has only gone over 200 once in the last 30 days and that was for about an hour(and about half the time the air is “good”) not that you would see that in a media report. The prices have actually gone up significantly, I remember the first year when my family visited me, we had a fantastic meal at a normal Chinese restaurant including beer for all 6 people, the total came to about $16 America dollars. But in order to not pay western prices all you have to do is go to normal Chinese restaurants (the vast majority have picture menus).
    Also the safety in Beijing cannot be oversold, regardless of where you are or when you are there it always feels safe(and I have randomly explored much of Beijing, not just the “tourist areas”). I regularly leave my wallet lying around the school I work in with no fear of theft. It has its problems, but all in all it is a great city to live in.

  38. Gravatar of Sean Sean
    16. May 2015 at 14:07

    Thanks for the reply Scott.

    I have to disagree on the cost of housing in the PPP deflator. Price:income ratios (ESPECIALLY for equal square footage) in Chinese Tier 1 cities’ metro areas are way higher than U.S. “Tier 1” cities’ metros. Same comparing Tier 2, Tier 3, Tier 4. A 1000 ft2 dwelling in Beijing 5th Ring Road is more expensive in USD terms than the equivalent in New York (Long Island or maybe White Plains, etc.).

    On Chile vs. China and Santiago vs. Beijing, it is hard to compare GDPPPP apples/apples as there are some things that are much cheaper in USD terms in China and Beijing (plumber, nanny) while others are much cheaper in Chile and Santiago (good wine, high-quality food of any type, eating or hotel lodging in a smoke-free environment).

    When I do my personal PPP comparisons, I always try to quality-adjust (which does make the PPP deflator very exposed to my personal tastes/biases). This clearly goes beyond the measurement of “USD GDP” which could and probably should be approached on an income basis using the actual exchange rate.

    That said, one thing that makes me rethink my opinion – and even moreso on Korea and most on Japan – is the street safety of almost any neighborhood. “Meal or haircut or dwelling” should be security-adjusted as part of the quality adjustment, no? In that case, my earlier statement on Chile, and to a lesser extent the U.S., would be incorrect.

    At the same time my experience with companies worldwide tells me I would much rather work at an American or Latin American company than a Chinese one, even for an equivalent salary (and the salary is usually NOT equivalent). Again, I am straying more into quality-of-life or at best hourly-wage calculations than strict “GDPPPP,” yet shouldn’t “workplace satisfaction” in some way be part of the PPP basket??

  39. Gravatar of TallDave TallDave
    16. May 2015 at 20:18

    Talldave, Ok, but would you agree it’s similar to South Korea. What I object to is people calling the air pollution a “catastrophe.” China has much more serious problems to deal with.

    It’s not, though. Look at that first map — China has levels that at a glance seem to average three times those measured in South Korea, and even worse in heavy industrial areas.

    I’m not at all sure this is not China’s worst problem (granted, this is mainly because everything else has improved so much). Maybe execs in Beijing don’t go home with stained shirts, but I bet they do in Yinchuan — Pittsburgh at its worst surely didn’t register a 999 pollution rating, and it’s probably actually worse than that because the scale just doesn’t go any higher.

    Remember, China lies, both to itself and everyone else, and it’s difficult to contradict a regime that arrests you for it. This is why free speech matters so much — it’s the one freedom without which all others must necessarily wilt.

  40. Gravatar of TallDave TallDave
    16. May 2015 at 20:24

    Here’s that first map again.

    http://kotaku.com/compare-how-awful-chinas-pollution-is-to-where-you-liv-1552652798

    “Catastrophe” may be not too strong given that it’s not just the air, this is probably a fair proxy for the water as well — those HALE numbers for Beijing are disturbing.

  41. Gravatar of Outside in – Involvements with reality » Blog Archive » Chaos Patch (#62) Outside in - Involvements with reality » Blog Archive » Chaos Patch (#62)
    17. May 2015 at 01:59

    […] report from China. Who lost China […]

  42. Gravatar of Scott Sumner Scott Sumner
    17. May 2015 at 09:12

    rob, Thanks, I’ve always enjoyed my visits to Beijing.

    Sean, I know someone who lives in a nice 1000sq foot unit near the Xizhimen station, and it’s worth about $500,000. That seems much less that NYC, but I’ll defer to your greater expertise.

    I agree with your other comments on the difficulty of doing quality of life comparisons. Correct me if I’m wrong, but I believe that people from places like South Korea are more willing to migrate to America than from a European country with similar GDP (PPP), say Spain or Italy. It seems to me that crowding affects the quality of life in East Asia.

    Talldave, You misunderstood me. I said the life expectancy in Beijing was similar to South Korea, despite much worse air pollution. So your data supports my point.

    You said:

    “Remember, China lies, both to itself and everyone else,”

    I’ve travelled all over China, and seen all sorts of cities. I think I have a pretty good idea how bad the pollution is. There are lots of days in Beijing with blue sky. And I can recall what pollution was like in the US in the mid-1960s, in places like Gary, Indiana. I assure you that China has much worse problems than pollution.

  43. Gravatar of Benny Lava Benny Lava
    17. May 2015 at 11:44

    6. Nothing like this in America, sadly. The closest thing is a PO box. The Amazon boxes are like PO boxes but for UPS. I wish America had these.

  44. Gravatar of Benny Lava Benny Lava
    17. May 2015 at 11:44

    Sorry I meant #3!

  45. Gravatar of TallDave TallDave
    17. May 2015 at 12:19

    I said the life expectancy in Beijing was similar to South Korea, despite much worse air pollution. So your data supports my point.

    Did you read the HALE #s? Life expectancy is higher, but healthy life expectancy is shockingly low, much lower than (say) Seoul.

  46. Gravatar of Quotes & Links #67 | Seeing Beyond the Absurd Quotes & Links #67 | Seeing Beyond the Absurd
    18. May 2015 at 02:20

    […] themoneyillusion.com: Report from China Interesting […]

  47. Gravatar of ssumner ssumner
    18. May 2015 at 11:49

    Talldave, That article says the HALE number for Chinese women is over 70, which is fine. Then they say:

    “The true size of the gap, however, was shocking. While life expectancies have continued to grow, HALE numbers have gone backward. According to a summary published to the Beijing CDC’s website, the data showed that an 18-year-old male Beijinger now has a life expectancy of 80 years, and a shockingly low HALE of 61.4. Far worse, and almost defying believability, an 18-year-old female Beijinger has a life expectancy of 84, and a HALE of 56.06. In other words, she should expect to spend 28 years — or roughly 41 percent of her remaining life — in ill health.”

    Sorry, but I think they made a big mistake. That 56.06 number can’t possible be even close to accurate. Beijing women are almost certainly healthier than the average Chinese woman nationwide. Perhaps they entered the data incorrectly of something.

    But if I’m wrong about the HALE number for Beijing, then I’ll admit I was wrong about air pollution. See if you can find any follow-up studies verifying that claim. If it were true, Beijing would be like one giant hospital.

  48. Gravatar of Owen W Owen W
    19. May 2015 at 06:46

    3: FWIW, I just moved (within the same area of Chicago, not downtown), and my UPS packages are now automatically delivered to a bodega a few blocks away. Which is fantastic of course.

  49. Gravatar of Eric’s Enlightenment for Friday, May 15, 2015 | The Chemical Statistician Eric’s Enlightenment for Friday, May 15, 2015 | The Chemical Statistician
    19. May 2015 at 17:56

    […] Scott Sumner’s wife documents her observations of Beijing during her current trip – very interesting comparisons of how normal life has changed rapidly over the past 10 years. […]

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