Money

For those of you who don’t work in international compensation and/or don’t travel out of the country, a note about money and prices as a preliminary to the next post, which will be about bargaining: The unit of currency in China is called, in daily life, the “yuan.” (More formally, it’s called “renminbi.”) China keeps the relationship between its currency and the dollar more or less fixed; the exchange value doesn’t “float” completely freely like that of most other currencies. The exchange rate is around 6.8 yuan per dollar, i.e. when you exchange money, you can “buy” about 6.8 yuan for a dollar, or a dollar for 6.8 yuan. Most things cost a lot less here than at home as measured by how many dollars I need to get enough yuan to buy them. By contrast, when I went to London and Brussels in 2008, a lot of things cost more than at home. The exchange rate is only a part of the reason for the differences; the cost of living in general is another part. It’s very complicated -- otherwise I would have to find a different line of work. But as far as traveling goes, at the moment it’s expensive for Americans to travel in Europe and cheap for us to travel in China. (Getting here is another story.) The cost of food here is shockingly low if you measure it in terms of the dollars I need to spend to get enough yuan to buy the meals. Jamie and I can go out to one of the little restaurants near the campus and get enough steamed buns and egg drop soup to keep us going for a lot of the day -- for 8 yuan, or a little over a dollar, apiece. On the other hand, wages in China are proportionally lower, so the meals don’t seem as cheap to local people. Vice versa (at least as to the meals) in Europe. Eating out in London was very expensive, and not just because the dollar was weak versus the pound at the time. (Take-out (or take-away, as they call it) was cheaper than eating in a sit-down restaurant, so that’s mostly what Maddy and I did on that trip.)