An American Dollar in Beijing

This afternoon after my morning Chinese class, I ventured out with two of my classmates to grab a quick lunch.  Grabbing a “quick” lunch in China is very different than picking up a “quick” lunch in the U.S.  Yes, we have the typical options such as McDonald’s and KFC; however, the more popular choice is to head to one of the many restaurants serving various types of Chinese cuisine.

There are many things that separate lunch here from your average lunch in The States.  First off, the food is obviously different (I won’t get into the major differences at this time, because that could be an entry by itself).  Second, the atmosphere contrasts with a typical restaurant lunch in the U.S.  Lunches here are almost always eaten family style, where you order a few dishes and let everyone share.  The last and probably most important difference is that the price is usually relatively low.

For example, today’s lunch cost the three of us about 38 Yuan—also known as the Ren min bi (RMB), which came out to about $5 dollars total!  The meal consisted of four dishes: two meat dishes, one vegetable dish, and, of course, fried rice.  We were also able to enjoy three Beijing beers, which usually are about 24 oz. and cost only 3-5 Yuan (36¢-60¢ U.S.) each.

The cheap cost of everyday living is a major advantage that appeals to foreigners living in China.  However, as China develops, the cost of living is changing daily. According to the China Daily, the Chinese Yuan has increased to its highest rate in history.  The Yuan, which until last July, had been fixed at 8.26 Yuan per U.S. dollar, is being increased slowly by China’s central bank. The Yuan has now risen to 8.0170 Yuan per U.S. dollar since last summer.  This should be welcomed by American businesses selling in China because it will lower the effective cost of American goods here. It also raises the price of Chinese goods coming into the American market, thus giving American-made products an increased relative price advantage.

However, for American expatriates living in China, the dollar’s diminishing purchasing power could change many everyday habits.  While chatting about the issue with one of my classmates, they mentioned that this would affect them greatly since their monthly salary is paid in US dollars.  As for me, since most of my funds are still held in an American bank account, my spending habits will also likely have to change. The 3200 Yuan I pay for rent every month is slowly creeping closer to the $400 mark. This is a big item in my budget here, so something has to give and it maybe even means finding another less costly place to live.

So, as I continue to live and work in China, the Yuan is now something that I need to keep my eye on.  In addition, I am not looking forward to the day when I talk to my friends and say, “Hey, do you remember when beer here used to only cost 36 cents a bottle?” However, the currency change is needed, and it should help ease economic tension between China and the U.S. that has festered due to what the U.S. felt was an inequitable exchange rate in the past.