Thomas F. Wilson

I OFTEN hear comments that prices in Shenzhen are higher than prices in the United States. On examination, I would say that indeed some prices are higher, but a lot of prices are lower than in America.

The price of gasoline is higher in Shenzhen, for example, while bus and taxi fares are lower than in the United States.

The World Bank reports for 2010 that China’s price level was 58 percent of the level of prices in the United States. The Economist’s tongue-in-cheek Big Mac index gives an almost identical 59 percent.

A McDonald’s Big Mac in Shekou is priced at 70 percent of the price in Indianapolis. That city’s prices are close to the average for the United States. Prices in Shekou (and Shenzhen) are expected to be higher than for China on average.

I examined food prices most closely. Certain food prices are much lower in Shekou than in Indianapolis. Seafood at the fish market, and rice, vegetables, and certain fruit at the Meiyiduo Supermarket are less than half the price in Indianapolis. The quality is essentially the same.

Exceptions would be apples and oranges, which have a wide price range, and bananas, which are priced about the same in both markets, being especially low in Indianapolis.

Similar results for groceries were found in Shekou Walmart and a Walmart in Indianapolis.

Further price comparisons between the Walmart stores found a range of items in Shekou priced significantly below their Indianapolis counterparts. Bicycles, toothpaste, towels, and clothing in general were cheaper; however, as some people have contended, appliances (e.g., refrigerators and microwave ovens) and electronics (e.g., laptop computers and TVs) tended to be more expensive in Shekou.

Services from haircuts to health care are priced lower here. While services would typically be priced lower, reflecting wage differentials, imports are priced higher and foreign brands produced in China appear to be priced close to U.S. prices.

I am most often asked about house prices. Housing per square meter is priced much lower in Indianapolis, which is close to the U.S. average. Indianapolis, of course, is not a mega-city on the scale of Shenzhen, so housing is in no way comparable.

While living in my cramped quarters in Shekou, I could hear throughout the day people chopping vegetables. Indeed, they seem to have chosen a low-cost, healthy diet, as long as they go light on the cooking oil and table salt.

Chinese clearly are at risk of choosing an unhealthy life style as incomes rise, so the price structure should continue to encourage the chopping of vegetables and the use of public transport.

(The author is a retired American banker and economist, who has taught finance at Shenzhen University.)