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LAST WORD: Logistics And Economy
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LOGISTICS AND ECONOMY

By Mike Cormack

BT 201709 LAST WORDS 05
      常年在国外工作生活的同胞在回国后通常会发现,自己期待的“外国赚钱国内花”的小算盘落空了——如今国内的物价已经直线上涨,与国外城市消费水平齐平,在国内尤其是中国大城市的消费不比世界上任何一个一线城市低。然而中国人均工资的水平并没有相应的快速提升:服务业通常相对价格优惠。与之形成鲜明对比的是,进口商品则非常昂贵,部分进口奢侈品与洋酒等产品在国内的价格甚至是国外售价的三倍,这种情况的出现主要归因于高额的进口关税以及对国内产业的扶持。另外,中国的基础设施建设虽然经历了多年发展,但是在一些方面依然效率低下。去超市购物时你需要存包,以免超市物品被窃;快递行业的高效率是建立在马不停蹄的人力交接工作基础之上;私营企业经历着残酷的竞争,而国有部门却囤积着大量闲置劳动力。在购买任何商品时,看着上面的价格,你都能感受到这是中国这个经济大环境下对这一商品产生的影响。我们热切期待中国经济向着更加健康成熟的方向发展,让每个商品拥有更为合理的价格。

BT 201709 LAST WORDS 03
One of the biggest surprises of coming to China for me was that often things were more expensive than back home. I had naively supposed that since China was poorer per person than the UK, naturally things would be less expensive. But the first few times I went shopping, I was staggered by the expense. I’d had no idea about the intensity of the summer heat either, so one of the first things I wanted was a pair of shorts. The local supermarket located nearby had a pair for what seemed to be a ridiculous amount of RMB300. All I wanted was a basic pair of shorts, nothing fancy, and had expected them to cost about $5 to $10. But there I was being asked to pay the equivalent of over $20. Similarly, I enjoy having nice smells wherever I live and so sought out an oil burner. The only oil on sale was a preposterous RMB400. In the UK I can buy a small bottle of scented oil for a few dollars.
 

hl lastThis is the thing about a less developed economy, as I’d gradually come to learn. It doesn’t operate in the same way as a developed economy, just at lower prices. The thing that is generally cheaper in China is wages. Services thus are usually fairly cheap. (The first time I went to get a haircut, I couldn’t believe the barber asked for RMB5, so I handed him a 50 yuan note and was shocked to get back RMB45. In 2007, that meant my haircut cost less than $1. I would have to pay a minimum of twenty-five times that amount back home). Imported goods and things dependent on advanced logistics are usually far pricier. Apple products are around 10% more expensive than in the US despite being made at the Foxconn factory. Wine, to my eternal irritation, is gallingly expensive. A standard Chilean Cabernet Sauvignon will cost around RMB120 at the 7-11, which is double what you’d pay in the UK and perhaps triple the cost of a decent bottle in France.
 

But this is largely down to taxing imports and favoring domestic industries. When it comes to everyday items, though, a less developed economy is more expensive because of its inefficiencies. China’s infrastructure, though going through a development boom, can be weak. Western supermarkets like Walmart and Tesco have struggled in China partly because their just-in-time deliveries and superb logistical and supply chains that provide consumer goods all year round do not work in China. (This is the reason why local e-commerce giants JD.com and Alibaba are spending heavily on creating their own delivery platforms).
 

BT 201709 LAST WORDS 04As so often in China, commerce is stepping up to the plate to improve infrastructure in what is generally known as a “win-win” outcome. Chinese supermarkets in particular seem agonizingly inefficient. In Huai’an, in Jinangsu province, the local Times supermarket employed someone to check your receipt before you could leave, positioning them perhaps ten feet from the tills. Quite what fraud you could commit in that distance I never understood. (You also weren’t allowed to wear a bag in the supermarket in case you stole something. It was like being insulted before you’d even stepped inside). I used to play a game where I counted the number of staff standing about on the shop floor and not doing anything – my highest score ever was 21.
 

It took me a long time to understand all this. (Well, I never studied economics). The remarkable delivery times and year-round produce we can enjoy in the west – where Amazon is experimenting with four-hour delivery in major cities – is in China achieved, if at all, on the backs of its labour force. The deliverymen you see on scooters around town are doing their best to provide in the face of clogged roads and inefficient links. This can work in the more developed, seaboard cities, but less so in case of intra-national logistics.
 

BT 201709 LAST WORDS 07
This doesn’t mean China is all inefficiencies. The private sector can be ruthless, working people to the bone and demanding ever-greater commitment. One of Jack Ma’s phrases is, “Today is hard, tomorrow will be worse but the day after tomorrow will be sunshine.” I’ve experienced this myself. Once I worked for a small company as a proofreader. After only a month, without any warning, disciplinary procedures, “steps to improve” or chats from my line manager, I was simply told, “It isn’t working out” and let go. I hadn’t been enjoying the job, to be fair, but this form of management is gratuitously brutal. But the state-owned sector has no imperative to be efficient; indeed, as a major contributor to employment statistics in a province, it has every incentive to hoard manpower. Though there are steps being taken to address overcapacity and over-manning in what is referred to as “supply-side reform”, an enormous culture change would be needed and that would only come when the money tap is turned off.
 

BT 201709 LAST WORDS 08
So when you’re looking to buy something in China and you grumble at the prices, be aware that prices are the financial manifestation of an entire economic system (this is true for every product but China seems to make it more apparent) and only changes to that will lead to a decent priced bottle of Pinot Noir. I am eagerly anticipating developments.
 

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