Dave:
I find this trade issue quite interesting. Somewhere I read about Ferrari
opening 40-some Ferrari Dealerships in China. That sort of puts the trade
deficit situation into perspective for us car enthusiasts.
I have a Chinese neighbor, John, originally from Hong Kong, and I asked him
how a nation such as China, with low wages and a low standard of living
could support 40-some Ferrari dealerships. John explained that a skilled
worker in China has much more spendable income than in America. John
retired from a San Francisco company and now lives here in Canada.
Here a basic worker might earn $8.00 per hour, for 40 hours per week,
netting $320.00 per week-less masive payroll deductions, most of which he
spends on a roof over his head, and food. While a skilled worker in China
works for half that, around $4.00 per hour, he puts in lots more hours per
week than an American worker. Typically, 12 hour days and 6 1/2 day weeks
net the Chinese worker $312 per week, with no payroll deductions (or very
little.) John said that the Chinese tax rate is very, very, low. Most
people own their own cottage, and grow most of their own food in a home
garden, and often sell the surplus they raise and grow. If they choose to
live in government housing it costs only a few dollars per month.
As a result, over 80 per cent of new car sales are for cash. This is the
common practice because the Chinese do not trust banks. Couples are the
usual typical buyers, and they carry bags or boxes or a small suitcase
filled with cash into a car dealership, and they buy for cash, and drive
away with a payment free car.
A lot of the workers in China are employed by American owned factories,
making everything from paint brushes to jet fighters. No wonder the trade
deficit is wide. British companies have exported their factories as well,
so many of the parts we need are made in those ex-patriot factories in
China.
Another Chinese I met here ran a grocery store, here in Regina, for all his
working life, until he decided toretire, demolished the building, sold the
property and retired to China. A 4,000 to 5,000 square foot conndominium in
China cost him around $40,000.00.
Ed - 1976 TR6
Regina, Sask.
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