Why do domestic products have to be sold to Chinese at a higher price?
Some netizens once found that in duty-free shops in Japan, a pack of Chinese cigarettes costs only 20 yuan, while in China, the same Chinese cigarettes are sold for 70 or 80 yuan.
The price of exported gasoline is seven or eight yuan in China, and only three yuan abroad. In other words, the price of the same thing sold to a foreigner is actually more than if it was discounted.
Is this double-standard behavior because the Chinese earn better money?
In any case, shouldn't domestic products make foreigners' money and enjoy the preferential treatment of Chinese? What is going on behind this huge price difference, let's find out.
First, no one can withstand the temptation of low prices
Everybody likes low-priced goods. If someone says they don't like it, then just set the price a little lower.
Why do you like low prices, the main reason is that you may not have much money in your pocket.
In 2020, data from the National Development and Reform Commission's research report released by the Chinese government website showed.
There are about 600 million people in China, who earn less than 1,090 yuan a month, accounting for about 40% of the country's population.
Among them, nearly 5.5 million people have zero income, and 200 million people earn less than 500 yuan a month.
And those mysterious high-income people, not to mention Ma Yun, Li Ka-shing, Liu Qiangdong, Zhong Sui and other well-known entrepreneurs.
Looking at the highest level that ordinary people can achieve, the monthly income of the high-income class is more than 36,589 yuan, although the proportion of the population is less than 1%.
But the gap between rich and poor is unbelievable.
This situation is very similar to the law of 28, although the numbers are not so precise, but the ideas coincide.
At the end of the 19th century and the beginning of the 20th century, the Italian economist Baledo proposed the "Twenty-Eight Law".
He argues that in any group of things, the most important is only a small part of it, about 20%, and the remaining 80%, although the majority, is secondary.
Using this law as an analogy between the rich and the poor in China, it is clear that there are only a few people at the top of the pyramid, and most of the rest are "unimportant" poor people.
The same is true abroad, with 29% of the U.S. underclass population (earning less than $42,000 a year) as of October 2022, according to Zippa's research.
Of course, this is only a set of superficial figures, and there are a large number of slum dwellers, basement dwellers and street sleepers, who are already very difficult to get a subsidy of $300 a month.
This amount of money is a drop in the bucket for improving life, but it is better than nothing.
Therefore, although the object of human society will always be the rich, it is indeed a world occupied by the poor.
So an outrageous and true conclusion was born: if you want to really make a lot of money, you can only make "poor people's money".
In China, Pinduoduo is well versed in this, and the founder Huang Zheng has surpassed the two big brothers of Alibaba and JD.com in just 8 years with ultra-low prices.
Looking overseas, the love of low-priced goods is not just the preserve of Chinese.
On September 1, 2022, Pinduoduo's cross-border e-commerce platform, Temu, was officially launched, and after a two-week testing period, it was fully available for sale.
In the more than a year since, Temu has been launched in 48 countries around the world.
Its app has been downloaded more than 200 million times and opened more than 120 million times, and has been consistently ranked first in Apple's App Store and Google Play download charts for a long time.
These figures are enough to prove that the low price of real incense has become a global law of competition.
Second, the price war is intensifying, just for the fans "overseas"?
But to be honest, even if the price is attractive, the development of domestic products still has a long way to go.
You must know that the brand influence and market share of domestic brands in foreign countries are far from those of other high-end brands.
And in foreign positioning, domestic products are generally low-end or mid-end goods.
They want to expand the market, but in fact, there is only one way to go: fight a price war and take the route of cheap and beautiful.
So it's really not that domestic products are maliciously sold to Chinese people at a higher price, but that they are forced to become "price butchers" abroad in order to make a glimmer of life.
"The price of Chinese goods is only one-third to one-fifth of that of other countries' goods. ”
Finnish websites have described the Singles' Day promotion made by Chinese as "the biggest discount festival in the world".
Obviously, more and more domestic products have gone abroad, and they have made waves at ultra-low prices in major markets around the world, and the influence of "Made in China" is expanding day by day.
But some people say that this is just a stopgap measure, after all, winning with price is only temporary, and it is hard power to do things well.
But the question is, if you don't have this time to develop your strength and lose the initial opportunity, how can you have everything that follows?
Moreover, China's low-price policy is by no means just a simple "cutting meat to survive".
There is a reason why its price can "kill" other countries in seconds.
First of all, the difference in labor costs is an important reason why domestic goods are cheaper abroad.
China is a country with a large population and a very rich labor resource.
In contrast, the cost of labor in some developed countries is very high, which leads to differences in production costs.
Secondly, the economic effect of production scale is also one of the important factors affecting the selling price of domestic products abroad.
As one of the world's largest manufacturing countries, China has a huge production scale.
Large-scale production can bring certain economies of scale, which can reduce the production cost of products from the root.
In general, it is precisely because of China's low labor costs and controllable production costs that domestic products can be marked at more attractive prices when they are sold abroad.
Of course, the most important point is the difference between domestic and foreign tax policies.
For example, a large part of the reason why Chinese cigarettes are so expensive is due to China's national conditions.
As a big tobacco country, China's tobacco tax is very high, plus other value-added tax, consumption tax, etc., the price has soared, and a pack of cigarettes cannot be reduced without 180 yuan.
However, it is not subject to this restriction abroad, and domestic products can even enjoy certain preferential tax policies, tax exemption or tax reduction, which can further reduce costs and prices.
Don't underestimate the impact of taxes on commodity prices.
For example, the tax on cigarettes in Japan is very low, with each pack of cigarettes only accounting for about 10% of the total price.
On the mainland, on the other hand, the tax per pack of cigarettes accounts for about 40% of the total price. As a result, the price of Chinese cigarettes in Japan is much lower than in China.
By the same token, China's tax on gasoline is relatively high, accounting for about 50% of the total price per liter of gasoline.
In Japan, the tax on gasoline per liter accounts for about 30% of the total price.
This leads to the fact that if you buy one pack of cigarettes at home, you can buy four packs abroad. And the miraculous phenomenon that the price of gasoline can be cut in half.
Of course, it is only the first step for domestic products to be able to "overseas" in the price war circle, and it is our ultimate goal to get a respite with low prices, invest more energy in the development of commodity quality, and improve their own strength.
Third, foreign and domestic markets, domestic products in parallel
Having said that, then why do domestic products have to "go out" even if the price is reduced?
Directly become a leading industry in China, isn't this money enough to make money?
Is there any other consumer market that has more potential than China? Why bother to make such a big effort to sell to foreigners with a shy face?
In fact, not only China, "going out" is an inevitable trend in the development of global trade.
On March 22, the National Development and Reform Commission held a special press conference to interpret the "Nansha Opinions", which mentioned that private enterprises have become the main force of "going out".
What the government urgently needs to do now is to speed up the improvement of a competitive comprehensive support policy system.
Provide financing solutions for enterprises to "go global", and give corresponding economic and policy support.
Therefore, not only domestic enterprises want to "go global", but the government also attaches great importance to and strongly supports it, which is a "two-way rush" between government and enterprises.
So what is the significance of the state's encouragement of the export of domestic products? This seems to be a matter of course, but in fact it is all deliberate and far-sighted.
Nowadays, the international economic and trade situation is severe and complex, and the "going out" strategy is implemented in depth in such an era of great changes.
It can not only make better use of "two markets and two resources" but also obtain global strategic resources.
It can also efficiently expand the international market space and enhance China's international competitiveness.
Expanding China's international status with the "national" economy is an internal path to achieve the dual-cycle development of government and enterprise economy, and it is also an efficient way to build a new development pattern for China in the world.
In short, the expansion of domestic and foreign markets is a two-way line.
They support each other, and the domestic market is the confidence and cornerstone of the development of foreign markets. The further expansion of the domestic market also requires a higher international vision and the support of cross-border resources.
On January 17, 2024, the National Bureau of Statistics released the economic "report card" for the whole of 2023.
After preliminary calculations, China's GDP in 2023 will be 1260582 billion yuan.
This represents an increase of 5.2% over the previous year. It has not only achieved the expected goals, but also achieved high-quality development.
It has achieved market development and driven the upward movement of the national economy. This is the significance of the Chinese government's encouragement of domestic exports.
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In fact, the difference in commodity prices between domestic and foreign countries is a very complex issue.
It involves not only economic factors such as exchange rates, taxes, and markets, but also the influence of cultural factors such as cultural identity and family and country feelings.
Taking into account these combined factors, the price of the commodity is ultimately determined.
Therefore, it is not meaningful to be obsessed with price comparison. After all, prices are also changing in real time, so we might as well focus on the economic rationale behind price changes.
Through price fluctuations, we can explore the improvement of the domestic industrial level, the changes in the related industrial chain, and understand whether the market channels are more sound, whether the employment opportunities will increase, and so on.
Predicting the future through phenomena is the essence behind price economics.