Why are goods cheaper in the US than China?
- By Lin Liyao
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E-mail China.org.cn, February 21, 2017
A group of economic researchers divided commodities and services into three categories according to relative prices in the U.S. and China.
The first kind of goods with lower prices in the U.S. are that are transported through global trade. They are mostly made in developing countries, such as China, India and Indonesia, and are sold in developed countries.
These goods include clothing, toys, electronic products, light industrial products and even vehicles. It's easy to find a skirt or a wallet in an American shop that's "Made in China."
Another group of goods with lower prices in the U.S. are those produced in large scale across the country, such as beef, corn and other agricultural products.
The U.S. embraces a vast territory with a sparse population. Thanks to its remarkably intensive agriculture and advanced machinery, high efficiency can easily reduce costs.
The third category of goods with higher prices in the U.S. than in China are those can't be imported from other countries and can't be produced in large scale, but only can be provided in batches, including most sectors from the service industry, such as catering, transportation and goods containing intellectual property.
The second and third categories are goods and service which can't be imported or exported in large scale. In order to reduce the price of consumer goods in China, one measure is to transform the third category of goods into the second kind.
China should carry out systematic reform and promote scientific and technological innovation, so as to improve efficiency and lower prices. That is called "supply-side structural reform" in industry.
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