Premiums and discounts in Shanghai

I'm not really sure how applicable this is to all emerging markets, but there is definitely a distinctive character to consumerism in Shanghai which could very well be similar in other rapidly growing economies. Prices are easy to take notice of in Shanghai, every day you will notice how strange things are compared to the western world. Take today for example...

I went to a bar called Big Bamboo to watch Arsenal destroy Blackburn (6-2, oh yeah!). It's aimed at westerners so it is not the greatest example, but there's way more impact using a current affair! Anyway, the cheapest pint of beer costs 40RMB (£3.70 or so). This isn't cheap. The place is not swanky at all, it's not like drinking at a fine restaurant! The expat audience makes sense, but still... £3.70 for a pint of beer is not cheap by any means. As I walk home, I walk past a ton of different shops. Clothes shops are criminally expensive here. It's probably the expat label they've stuck on every item in the mall... but expats aren't stupid. It's more expensive to buy decent clothes in Shanghai than it is in London.

It is highly annoying, because the choice is so good here. There are brands I have never heard of here, that seem to be pretty big abroad. Every big name is concentrated in the area I live, so it's really cool to walk around and pretend you're rich. At least you can keep up to date with any fashion trends (not that I really dress according to trends, I'm totally unfashionable!). But the prices are just insane. Lacoste, a standard low-end luxury/high-end highstreet brand, is a great example. The price of a Lacoste polo shirt is around 500RMB in England (£47-50 or so). In China it's usually bordering the 900RMB mark. The clothes are made in China! You'd think moving to the source would reduce your expenses, but China has such a huge obsession with wasting money that it is more expensive to shop here!

What I mean by this "wasting money" is that there seems to be no concept of 'value for money' over here. The rich people can shop in the expensive places. But the types of people that are rich in China seem to have so much money that they don't care if they're paying 100% more for their items. It's like the staff can just choose a ridiculously high price for things and it will not effect demand one bit. Demand is very low, that's obvious to anyone who's walked around these derelict malls for more than 5 minutes, but I guess the demand they do have is completely inelastic.

So you can buy a designer shirt for 5000RMB (£500) or pay 2 month's rent in an area the equivalent of Oxford Street. You can a delicious meal at a reasonable chain restaurant (something like Wagamama's or Pizza Express) or you can buy an ice-cream sundae. It's weird!

It's also kind of sad. When you're in China as a western man, things seem pretty easy. At least compared to the UK. People automatically thing you're rich, you're educated, you have good manners, you're generous and attractive. Doesn't matter how horrific you are, if you have white skin you're going to attract some attention from the local Chinese girls. While it sounds like paradise, if you get to thinking about it.. it's thoroughly depressing. If you manage to actually charm a girl, something which I find to be challenging to say the least, you're going to constantly have the idea that maybe she doesn't actually like you. Maybe she's just attracted (or feigning attraction) because of the aforementioned reasons. In England you know where you stand, but in China everyone seems to have predetermined judgements about you. It's like positive racism. Of course there is negative racism, like people acting amazed when you speak the tiniest amount of Chinese (God it's patronizing). That's not exactly having to deal with the KKK or anything.

Going deep into the Chinese psyche is something that will probably take numerous blog posts. It really is an interesting culture in Shanghai, especially how it parallels with some English cultures. But for this short summary, there is definitely a positive/negative, ying/yang, premium/discount when living here. You might be spending more, but you generally don't have to earn a penny to impress people when you're from the west.

All about the Maos

So I got my first good sleep since I arrived last night. I've been napping a lot, might be the heat or really long jetlag but I've felt the need to have a few hours in the middle of the day. Then I wake up at 6am the next day and the cycle repeats. Indeed, last night I went to bed at 9:30pm because I'd been running around town looking for apartments. 6 hours and I found one I kinda liked, but it only had 3 bedrooms (and therefore only 2 people). Fortunately I was waiting on a response from a 6 bedroom flat I saw the other day and I got the greenlight to move in! So that's cool, gonna be out of this hostel in 3 days. That's just a little update on the housing situation. Now onto the main subject of this blog.

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The amount stuff costs in Shanghai is really warped compared to the UK. I was speaking to an estate agent yesterday and she said that everything is quite affordable, except housing. I think it's the complete opposite. For example, in Manchester my 3 bedroom student flat in a decent location was £480 a month (around 4900RMB). In Shanghai my maximum budget (which I'm hitting) is around £240 a month (2500RMB). That is hella cheap if you've ever rented property in the UK. If I actually had a real job, I could live somewhere absolutely incredible... maybe something for the future ;)

After deciding to go out for lunch (as in, spend more than 4RMB on street food) I was in the main shopping area of Shanghai (well one of them anyway); Nanjing Xi Lu. This area has so many designer brands and podgy white people that you would think you were in New York if it wasn't for the humidity. Since I'm here on my own, and haven't got anyone to hang around with, I've just been leisurely exploring malls and seeing what there is. My primary goal is to find an arcade with a Drummania game, so I can get my percussion fix.. but alas I've come up short every time. Secondly I've been trying to work out what sort of stuff I can afford over here. In Shanghai I can get a very decent sized meal for about 50RMB (£5 now, £3.50 back then). On the other hand, if I wanted to get a Chocolate Sundae at some American chain it would cost about the same. So you can have a banquet or an ice-cream for the same price. Weird huh?

Things are a lot different now than they used to be. As a result of Gordon Brown dumping my UK-Chinese savings onto a slab and cutting a fat third off of the amount, things are expensive over here. Despite the fact that the majority of the higher end brands are made in China, it's often more expensive to buy clothes here than in the UK! Take Lacoste for example, in the UK a Lacoste polo shirt is likely to cost about £65ish? I think.. I don't actually own one but that price rings a bell when I was looking pre-departure. In Shanghai a Lacoste polo shirt costs around 900RMB (£85)... and that's a cheap one. Before the credit crunch 900RMB was only about £65, but now it's £20 more. In another shop I saw a Lacoste shirt (I think, it had the same logo) for 1100RMB reduced from 3300RMB.... reduced from 6600RMB!!! That's like £640 for a polo shirt. Even before the credit crunch that is absolutely ridiculous. If you compare that to my rent, I could get a house for 2.5 months (6250RMB) or I could get a polo shirt (6600RMB). Drinks are also way too pricey. Now £10 is only 100RMB, those bottles of beer for 50RMB are not so appealing anymore. £5 for a bottle of beer... you really do not realize how expensive things are until you convert them and think of where in England would you pay £5 for a bottle of beer.

What does the typical Chinese executive earn these days? It's absolutely ludicrous how high these things are priced. No-one can afford it! The mall (Plaza 66) is rather empty, at least all the shops inside, so it's obvious that these stores are just there to keep up appearances. Even if I earnt a decent salary, the price of even the lower range of luxury brands are unaffordable (affordability of course includes value for money, even if I could buy it I wouldn't). So I just browsed... from outside the stores. Some of it was the shame of walking into a place that expensive wearing messy Vans with shorts and a t-shirt that has seen better days. There are other problems with Chinese shops that I gotsta tell you about but that can be saved for later.

After a thoroughly depressing afternoon, realizing that my idea of coming to China and living like a pimp, I went to a more regular store; the Puma store near Nanjing Xi Lu Subway. I found a pair of trainers that I really liked, for 419RMB with 30% off. That's what I'm talking about! But they didn't have my size. Seriously, anyone who says that the 'All Asian men have small penises' theory is a myth needs to try and get a pair of shoes in Shanghai. They didn't have US11? Come on! I might go back and ask them to order in a pair, if they can.

My worries were confirmed when I left the subway heading back to the hostel. I walked off the train and saw a white guy, about 24ish, wearing a t-shirt with a huge hole over the left sleeve. Got a feeling that's going to be me by the time I leave Shanghai.