In a report released at the beginning of 2021, the U.S. Bureau of Economic Analysis surmised that the economy of the People's Republic of China would outsize that of the United States of America by the year 2028. The prediction was based on a study of the economic growth of the two respective nation-states; it demonstrated a steeper trajectory by the PRC than that of the USA.
However, these projections are grounded in assumptions that may or may not be valid in the coming years. Furthermore, these macro-forecasts shed little light on how people actually live. How expensive is it, then, to live in China compared to the U.S.?
China Cost of Living vs US Cost of Living
Eating and Drinking, East and West
In spite of its significant strides in industry, manufacturing and technology, China depends greatly on its agricultural sector. Starting at a most basic level, a bottle of water costs nearly 400 percent more in the States than in the PRC. A modestly priced restaurant may average $3.38 U.S. dollars for a simple meal and beverage in China; in the U.S., a similar repast might cost over $14. Even a fast-food combo meal, from the same chain, can run at half the American price in the PRC.
Beyond eating out, groceries also favor China as a better bargain: a loaf of sandwich bread at an American supermarket is priced on average at $2.69, whereas a loaf of equivalent quality will cost a full dollar less in China. Meanwhile, boneless chicken breast sells for more than twice the Chinese price in the United States, while potatoes are almost three times as much in America as in the People's Republic. These advantages to China are little surprise since Chinese agriculture is more heavily subsidized by the government.
Shelter and Housing: Apples and Oranges
A cost of living comparison is not complete without a look at housing. Where do the Chinese sleep and dwell? In fact, Chinese real estate is complicated as the government owns all of the land. It will distribute lots to builders and homeowners, offering leases from 20 to 70 years. What's more, owners cannot convey their homes unless the land lease is current and in good standing.
Needless to say, renting is cheaper and easier so the American dream of homeownership does not translate. In terms of rental payments, utilities and amenities, apartment dwellers pay less in China, with a downtown one-bedroom unit listing for $375 per month. A unit of similar dimensions and location will be marketed for over $1,200 monthly in the U.S. The cost of living in China for students, therefore, is less of a burden.
Getting from Here to There
In Chinese metropolitan areas, walking is the most popular form of conveyance, followed by automobiles. Gasoline is cheaper in the U.S. by a third. Yet, between higher taxes and tighter credit, car ownership is slipping in China. Because public transportation is well-subsidized by the communist government of the PRC, a monthly pass for buses and trains is about $17.50 while a comprehensive pass in New York City, say, is over $60.
It Depends on What You Value
Lower prices can correlate to less freedom overall. Also, American per capita income, average wages and purchasing power dwarf those of China. Each individual must consider what is most precious and dear before doing a side-by-side analysis.
Adam Luehrs is a writer during the day and a voracious reader at night. He focuses mostly on finance writing and has a passion for real estate, credit card deals, and investing.