China Money vs ‘Real Money’
If you’ve ever been to China, especially anywhere outside of Shanghai / Beijing / Guangzhou / Shenzhen, you probably came away amazed at how inexpensive everything seems. That, at least, is your first impression. And it’s true for much of the developed world.
My impression, and those of many others who have spent some time in China being paid less than an expat package, is a little different. It’s not China that seems cheap, it’s the rest of the world that seems ridiculously expensive. This is the conversation I had yesterday (and have had many times before) with a friend who makes the distinction between China – where everything is cheap – and most of the West – where you have to use ‘Real Money’ to buy things that would bankrupt us here in China.
Saving Peanuts for the Future
At the moment, I am still making very little money here in China, relatively. And yet I strive to save as much as I can, knowing that in several years when going back to the States with my girlfriend (to be wife), we will likely have to live off my savings while looking for work. That’s a scary prospect, because taking China wages to a developed country is akin to swimming across the English channel with an inflatable life vest.
And to save up enough money to get by for a while when we go back home, I am now sacrificing many pleasures that would cost much more in the States. It’s enough, in some ways, to make one remotely consider never going home and instead just spend all of my earnings now.
Future as cloudy as the sky in China
But while my future is as cloudy as the sky here in Shanghai at the moment, I do know one thing. Living and traveling throughout China has given me some appreciation for the incredible income that Americans and much of the developed world still hold onto. This is painfully apparent from how much better off the average American still is in relation to the average Chinese person. But will it last?
China has helped teach me to try and be happy with less, and has strongly struck me with the fact that the world hit a turning point around the end of the last millennium, one in the wages of regular workers in much of the developed world will likely need to continue falling (like they have in America over the last 5-6 years) for quite a while as competition from China, India, and other parts of the developing world heats up.
Living in China has helped strengthen the realization that while Americans are still quite well off, that forces are in place which may well prevent the median standard of living from rising in the States for a long time. And since many Americans still cling to the idea that progress, individually and as a nation, is virtually inevitable from generation to generation – the numbers of those that live beyond their means continues to scale upwards rapidly as their real incomes fall.
Basically, whether you earn China Money or ‘Real Money’ – you probably need to save a bit more than you are now. At least I know I do.